efforts in this direction have included establishing the institutions and the infrastructure to improve market efficiency of money, capital and foreign exchange markets. the securities commission, the domestic rating agencies, cagamas and the cooperative commission were among the initiatives initiated by the bank. the development of a robust and vibrant foreign exchange market still remains an outstanding area of development. as a highly open economy, this market is a vital part of our financial system. the country exited from the currency board system in 1967 and introduced the ringgit ( known as the malaysian dollar then ). the changeover was successful. it was a time when there was an absence of speculators. it was only in 1997 - 98 when the ringgit and other regional currencies came under speculative attack. the volume of foreign exchange transactions had become massive, far exceeding volume of trade and the normal financial flows. this resulted in exchange rate volatility during the asian crisis that occurred wave after wave. regional currencies continued to plummet during this period. after more than a year of this turmoil and uncertainty in the foreign exchange market, malaysia implemented selective capital controls and de - internationalised the ringgit. this was instrumental in restoring stability in the market. it acted very much like a circuit breaker. offshore trading of the ringgit, the major source for financing the speculative attacks, was effectively eliminated. within a year, all the controls that were imposed were removed. more than 10 years later, the ringgit, however, still remains non - internationalised. an important precondition for the internationalisation is the development of a robust foreign exchange market in our financial system. financial stability the events surrounding the current financial crisis has brought into sharp focus the role of central banks in financial stability. as these events continue to unfold with great uncertainty on the financial markets and broader economy, allow me to reflect on bank negara malaysia's own role in financial stability. in addition to its functions as the lender of last resort, bank negara malaysia has also had the responsibility for the regulation of banking institutions. since 1988, the bank also assumed responsibility for the insurance industry and in 2002, the development financial institutions. the prudential regulatory and supervisory framework during these fifty years has undergone significant change. the prudential framework and supervisory approaches adopted by the bank provided the flexibility to respond to the new developments and challenges that have confronted the financial sector. several factors have guided the approach adopted by the bank. the first is to recognise the limitations of

diversified financial system, from a highly controlled financial system to greater market orientation, from a highly fragmented system to one that is more consolidated and rationalised, and to a financial system that is supported by an extensive legal regime and regulatory and supervisory framework, and a financial system that is more liberalised with stronger international linkages. part of the institutional building was the establishment of regulatory institutions that have clearly defined mandates. these institutions join us today in celebrating the long tradition of cooperation to meet the common purpose. specialised development financial institutions were also established to promote access to financial services to sectors that are not being serviced by existing financial institutions. financial inclusion, to ensure all economic activities and all segments of society have access to financial services, has been a key priority. currently, about 80 % of our population have some forms of banking accounts other financial infrastructure established by the bank to support the intermediation process includes the comprehensive centrally coordinated credit information system at the national level which allows for better - informed credit decisions by financial institutions. in addition, the credit guarantee corporation was established to provide support for small businesses. cagamas, the national mortgage corporation, was established by the central bank to ensure a steady flow of funds to the housing industry and develop a secondary mortgage market. at the centre of the financial infrastructure is the payments infrastructure which has been enhanced and modernised over the years to achieve greater efficiency and reliability of the payments system. the payments landscape has evolved from one that was mainly paperbased to include a range of new electronic forms of payment. internet banking which was not available in malaysia as recent as 10 years ago is now widely used by the entire population of internet subscribers in the country. the acceleration of the nation's migration to the more efficient electronic payments continues to be an important agenda of the central bank. complementing institution building has also included the support given to the development of talent in the financial services industry. the growth of the financial sector cannot be achieved without adequate attention to the development of the professional requirements of the financial services industry. in the recent two decades, a comprehensive islamic financial system has also evolved in malaysia, including the institutions, markets and supporting legal, regulatory and supervisory framework. the islamic financial system now offers the full breadth and depth of islamic financial services. malaysia is the host to the secretariat for the islamic financial services board in kuala lumpur that sets the international regulatory and supervisory standards in islamic finance. financial market development has also been central to building a robust financial system. the central bank's