zeti akhtar aziz : raising standards in malaysia ’ s financial services industry remarks by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the centre of excellence ( ace ) ground breaking ceremony, kuala lumpur, 22 february 2016. * * * it is my very great pleasure to be here on the occasion of the ground breaking ceremony to the ace – a centre of excellence. ace is a very much welcomed industry led initiative to raise the level of capability and professionalism for the work force in the malaysian financial services industry. our financial services industry continues to be reshaped and transformed by several major forces of change that range from the new demands of consumers and businesses to the rapid advancement in technology, the global regulatory reforms and the continued globalisation of finance. on the domestic front we are also seeing the continued rapid expansion of the domestic financial services industry, and the deepening of regional economic and financial integration. given the paramount role of the financial system in supporting our real economy we require a financial system that will best serve our economy. it not only needs to be effective and efficient and thus competitive but also robust and resilient. going forward, operating in this highly dynamic environment will become increasingly more challenging. today the malaysian financial industry employs more than 150, 000 people, and requires approximately 73, 000 new hires over the next 10 years. with the changes that are reshaping the financial system, skills requirements in the financial industry will also change. today new careers are also being created in more diverse areas including in areas of finance that have leveraged on technology such as in internet based services. further challenges will arise from the intensification of competition for talent in a more borderless workplace. given the importance of talent to performance greater attention needs to be accorded to talent development. there also continues to be an acute talent shortage of such skilled talent in our financial services industry. if left unresolved it will impede future growth and performance of the industry. this existing significant skills gap is already becoming a constraint on industry growth. indicators from the aif skills gap index, which measures skills gaps within the workforce, point to a significant deficit in several skill sets that are considered important in the financial services industry. the creation of ace represents an important step in efforts to provide a comprehensive and integrated solution for such skills and talent development for the industry. at the executive level, leadership, corporate governance and ethics are issues that have dominated attention

for price stability were so high that we needed to act. have jens weidmann and sabine lautenschlager been all too relentless in their criticism? liikanen : no, it ’ s been professional. nobody can claim for not having been heard in the governing council. history will tell whether our timing was right. i hope the economy in the euro area will turn for the better. the germans admire the bundesbank. the blueprint in the creation of the ecb was meant to be the bundesbank – now there seems to be not much left of it. liikanen : i admire the bundesbank too. we all learned the value of monetary policy independence by studying the history of the bundesbank. that is what the ecb fights for. the spirit is there. when inflation rates were too high, i have been one of the first to support higher interest rates. but if interest rates are close to zero, and we have protracted low inflation and deflationary risks, that requires early action. you have to act while you can. bis central bankers ’ speeches the bundesbank thinks the ecb is going too far. liikanen : there is a new question for central bankers : if our inflation is too low should you react with the same vigor as when it is too high? should you? liikanen : i am a hawk in both directions, fighting inflation and preventing deflation. there are people who say zero inflation is fine. i think zero inflation makes the economy vulnerable without any buffers. the ecb objective of below but close to 2 percent in the medium term is safer. we haven ’ t had this kind of a problem before, in the postwar period. rather, inflation was the problem, and the bundesbank has a great record there. now we talk about the prospect of too low inflation for too long. we have to go far back in history to the 1930 ’ s to understand the dangers of deflation. you would not believe how often the history books are being quoted among central bankers in various discussions. but buying government bonds always has the odor of financing government deficits? don ’ t you agree? liikanen : no, not when we are doing it the way we decided to do it. we only buy bonds on the secondary market, we buy according to the capital keys of the eurosystem members, we buy maximum 25 percent of each issuance and maximum 33 percent of each issue