operations with the changes in operating environment and risk management expectations. we have learned and relearned abundant lessons from the experience of the past crisis and many of those lessons lead to changes in regulation, supervision, enforcement and risk management practices throughout the world. as these new rules are designed and implemented, we are expected to adapt and change our business models and risk practices. bank negara malaysia is adapting as well. i have highlighted earlier the development on the regulation and supervision ’ s front. allow me to highlight key developments on the enforcement front. given that combating financial crime continues to be one of our key priorities in sustaining financial sector integrity, bank negara malaysia is intensifying enforcement actions on aml / cft non - compliances and breaches of legislations. since 2012, bank negara malaysia had compounded several banks and money service business operators for various non - compliances with the anti - money laundering and anti - terrorist financing act 2001 ( amlatfa ). besides amlatfa, the new aml / cft policies are also issued under the fsa and ifsa. fsa and ifsa provide bank negara malaysia with wider enforcement powers including the administrative and civil sanctions for breaches under these acts. fsa and ifsa also allow for enforcement actions taken under these legislations to be made public. this means that the reputational stake for non - compliance has been set higher. bis central bankers ’ speeches this is necessary to strengthen financial sector ’ s compliance to aml / cft policies and preserve the integrity of the financial system from being abuse for criminal activities. bank negara malaysia recognises that the vast majority of the dnfbps seek to comply with the law and for certain profession such as the lawyers and the accountants, through their ethical obligations. however, given that the controls on money laundering risks implemented at the financial institutions are increasingly tightened, there is this emerging consequence that dnfbps, particularly the legal professionals, are increasingly becoming more attractive for the criminals to launder their ill - gotten gain. according to the report published by the fatf on money laundering involving legal professionals, key among those factors are the perception that the involvement of legal professionals provides a further step in the chain to frustrate investigation by law enforcement authorities. thus, it is imperative for dnfbps to increase their awareness and understanding on how their industry can be susceptible to money laundering and takes necessary measures commensurate with the money laundering and terrorism financing risks

investors, including from the middle east, to leverage on malaysia as an investment gateway to tap the rapidly growing investment opportunities in the east asian region. thirdly, this partnership also serves to enhance malaysia as a centre of product innovation in islamic finance. indeed, conscious efforts have been made to ensure a conducive environment for innovation in malaysia, including the development of the necessary pool of expertise and talent to drive such innovation. within bank islam itself, there is a track record and brand name for innovation, with the development of new business models and product offerings. this partnership would thus contribute towards accelerating this process and towards serving as a bridge to strengthen the relationship of the islamic financial markets as well as the investment and trade ties between the west asian and north african regions, with east asia. strengthening the capital of a financial institution, however, is not the only factor that will determine its capacity and potential to perform. equally important is the quality of its talent, the systems that it has in place, in particular, its risk management and ict systems and its governance structure, its leadership and its corporate culture. thus, while this capitalisation exercise will put bank islam in a stronger position to tap new opportunities, all the other elements also need to be in place to enable the institution to realise its true potential. sound corporate governance and effective management of banking institutions are vital to ensure their effective and sound functioning. in particular, significant shareholders are expected to play an active role to ensure that capable individuals are appointed on the board and senior management of banking institutions. bank negara malaysia had as early as 2001 required the board and management of bank islam to undertake remedial actions on several operational and control weaknesses. when the weaknesses were not adequately addressed, the process of reconstituting the board and management of bank islam was initiated in 2003. in such an exercise, key shareholders are expected to be proactive in making prudent and responsible action to remove any member or employee that is found to be unsuitable or not having the required calibre so as to avoid a prolonged process in the reconstruction of the board and management of the bank. it needs to be recognized that the responsibility for the safety and soundness at the institutional level rests primarily with the board and the management of each banking institution and the key stakeholders such as the significant shareholders. institutional investors should also have an active role and make swift and bold decisions in ensuring that only capable individuals are appointed and remain on the board and senior management of banking institutions.