is that combating financial crime is a shared responsibility. it is not the sole responsibility of central bank supervisors, financial intelligent units, banks or even the compliance function within financial institutions. just as individuals, all of us have a collective responsibility to contribute to nation building, it is the responsibility of each player in the financial system, law enforcement agencies, prosecution agencies and the judiciary to look out for potential abuses, stamp out financial crimes and not let the perpetrators get away. for financial crimes do not occur in isolation. they are a conduit for other forms of serious crimes. almost all forms of serious crimes, such as human trafficking, drug trade and organised syndicates fund their activities through some form of financial crime. as such, financial crimes are inherently complex, and often will involve multiple enforcement agencies, sometimes even across borders. this reinforces the call for greater shared responsibility to shine a light on these 1 / 5 bis central bankers'speeches dark areas of the financial system. one of the key ways to exercise this responsibility is through the sharing of information. more effectively, this means putting in place an effective and mutually reinforcing ecosystem or platform where the relevant parties are able to partner together to report and investigate financial crime. in malaysia, this is a burgeoning area that we are looking to deepen. we are encouraged by the early results that explores adapting the public - private partnership model of other countries such as the united kingdom and australia. so far, partnerships between the royal malaysian police, selected financial institutions and money services businesses have resulted in 9 successful cases being prosecuted in the area of terrorism and terrorism financing. the idea behind these partnerships is to make intelligence sharing more meaningful and create an ecosystem where various pieces of the ‘ jigsaw puzzle ’ can be put together. different parties will have different access to information and different comparative advantages. fusing and complementing them will add to the number of cases that can be detected and prosecuted. this will also act as a deterrent as it signals the commitment and extent to which the relevant authorities and the industry will go to stamp out crime. hence, we are looking forward to expand this partnership for different types of crimes. organisations such as the compliance officers networking group of malaysia ( cong ) and the industry associations can also play a role in enhancing the professionalism and capacity building of compliance officers in malaysia. the development of human capital is essential in our efforts to combat financial crime. it is our biggest asset, more than any technology. for bank ne

cross the boundaries into other fields. we noted for instance in the monetary policy committee statement our concerns about the debt crises in advanced economies and considered in our discussions the possibilities of how this crisis might be resolved. this general increase in uncertainty has become a characteristic of the post - recession world, and one that appears especially hard to cast off. uncertainty demands a greater application of judgement across a broader range of perspectives than in times when variables move in clear directions and risks are low. 3. conclusion these thoughts prompt us to recognise that flexibility is a key ingredient of useful macroeconomic forecasting exercises, even as flexibility may seem to violate the very idea of a model. this tension is in fact quite important. the inflexibility of a model ’ s fixed relationships help us to assess whether today ’ s actual outcomes will continue in the future or adjust in line with the historical relationships reflected in the model. as real world outcomes change, we in turn ask ourselves what is wrong with our model relationships or what other conditions have changed to generate outcomes beyond what the model suggests. in short, the framework used to produce forecasts must be dynamic and able to change should circumstances require. one area for future work for us in the reserve bank is to incorporate the lessons of the financial crisis and recession into how we use our macro econometric and other models. the financial crisis that has occurred was so unexpected that very few, if any, macroeconometric models captured the inter - linkages between the real and the financial spheres. beyond interest rates, macro econometric models generally do not include financial transmission mechanisms. clearly this needs to change, but we also need to recognise that even much more extensive coverage will not compensate for intensive regulatory focus on financial and asset markets and the balance sheets of institutions operating in them. and from a policy - making perspective, we need to recognise that whatever progress we make in refining and calibrating our models, and achieving a higher level of their sophistication, they will never be able to absolve us from our responsibility to ultimately exercise judgement in reaching any policy decisions. thank you. bis central bankers ’ speeches