zeti akhtar aziz : monetary and financial policies in the asian network economy introductory remarks by dr zeti akhtar aziz, governor of the central bank of malaysia, at the tun ismail ali chair public lecture by datuk seri panglima andrew sheng on “ monetary and financial policies in the asian network economy ”, kuala lumpur, 18 april 2006. * * * introduction let me first of all welcome you to the tun ismail ali public lecture for 2006. this public lecture is part of a series of events organised in conjunction with the tun ismail ali chair in monetary and financial economics at the university of malaya. the chair was established by bank negara malaysia in august 2000 to commemorate the contributions of the late tun ismail mohamed ali, the first malaysian governor of bank negara malaysia. it is our hope that this chair would contribute to the advancement of new ideas and knowledge in the area of monetary and financial economics. today, we are indeed honoured to have datuk seri panglima andrew sheng, holder of the tun ismail ali chair for 2006, to speak to us on " monetary and financial policies in the asian network economy ". this occasion is particularly meaningful because andrew was with bank negara malaysia for many years, from 1976 a€ “ 89, and during that period, he had worked closely with the late tun ismail ali. ladies and gentlemen, the theme for today's public lecture : " monetary and financial policies in the asian network economy " is indeed timely and highly relevant, in the current regional and global environment. the asian economies have always been highly integrated into the global economic and financial network. indeed, the success of the asian economies lies essentially in its ability to be highly networked. the nature of these networks however, has evolved over time, heightening the complex nature of the interlinkages. in this recent decade, this trend is being reinforced by the intensification of regional integration. it is being facilitated by increased liberalisation and the increased potential for complementarities in the region. it is also driven by the conscious efforts by the authorities to facilitate the integration process. this is premised on the potential for increasingly mutually reinforcing positive outcomes. there is a growing recognition of the need for enhancements to the institutional arrangements and regulatory and legal framework to better manage the risks and vulnerabilities associated with the network economy. in this regard, an enhanced understanding of the changes in the way financial markets and payment systems operate in a more connected environment becomes important

##ntial instruments might not be needed in the direction of tightening, as domestic credit expansion will weaken. distinguished guests, i would like to underscore once more that as the central bank, our primary objective is to achieve and maintain price stability, and that as stipulated by article 4 of the cbrt law, we are responsible for “ taking precautions for enhancing the stability in the financial system and taking regulatory measures with respect to money and foreign exchange markets ”. therefore, we will continue to act with due diligence in terms of financial stability in the upcoming period as well. however, the central bank is not the only entity in charge of financial stability. other public authorities such as the ministry of finance, undersecretariat of treasury, capital markets board of turkey, and primarily the banking regulation and supervision agency, also have significant authority and policy instruments in this regard. it is essential that in the period we are going through, all policy instruments in hand should be deployed in a coordinated manner for the establishment of a sounder and more stable financial structure. to close my remarks, i would once again like to thank everyone who has contributed to the organization of this event.