pillar 2 requirements. secondly, the nature of climate - related risks calls for central banks and regulators to collaborate at the national level to support alignment of financial industry responses with national climate strategies and priorities. as i mentioned at the start of my remarks, central banks and financial regulators provide an important bridge between the financial sector and the government to inform national policies, targets and strategies on the one hand, and financial sector responses to climate risk on the other hand. in malaysia, jc3 serves as a focal point for engagements with the malaysian climate change action council ( mycac ) 1 on national climate policies. third, effective coordination with the industry serves to maximise transition benefits and minimise downside risks. for developing and emerging economies in particular, an inclusive strategy is key to avoid macroeconomic and social dislocations as we transition to a low - carbon economy. as financial and economic advisors to the government, we are working with the government to develop sustainable finance roadmaps that will mitigate risks of stranded assets if disorderly transition occurs. the bank ’ s principles - based taxonomy was developed with this in mind. the taxonomy aims to facilitate the direction of financial flows to activities that support the transition to a low - carbon and climate resilient economy. it supports businesses in transition by recognising climate risk mitigation and adaptation efforts over time, while preserving the rigour of assessments by avoiding greenwashing. the taxonomy also encourages financial institutions to nurture and nudge businesses to 2 / 3 bis central bankers'speeches transition to greener practices. it helps improve development outcomes, and builds capacity within businesses themselves to better manage climate - related risks. to further support transition activities, the bank has also established funds to assist smes in pivoting their businesses to be more sustainable in the post - pandemic world. this includes transitioning to greener activities. the bank is looking to further expand these facilities with a greater focus on green activities that are aligned with the taxonomy going forward. the bank also sees great value in pursuing a coordinated and regionally coherent financial sector response to the climate challenge. within asean, the bank is working closely with central banks in the region through the asean taxonomy board in the construction of a regional taxonomy that can provide a common language for sustainable finance in asean and promote efficiency. this will encourage the alignment of national taxonomies, building on common principles and a tiering system to cater to differences in financial systems, economic and social structures, and

capital adequacy ratio stood at 242 % at the end of the first quarter of 2010, well above the benchmark supervisory target of 130 % set under the rbc framework. total net premiums and contributions for insurers and takaful operators grew by 8. 2 % during 2009. this was driven by growth in the ordinary life segments of the life and family takaful industry, and a broad - based demand in the general sector. also of significance is that insurers in malaysia have performed considerably well in managing and responding to the challenges of lower investment returns and the lower interest rate environment following the global financial crisis. also notable is the rapid progress of malaysia ’ s islamic financial industry which has become a competitive sector and one of the key drivers of economic growth in the country. as malaysia evolves and emerges as a major international islamic financial hub, bank negara will continue to play an active role in promoting islamic financial products and services, supporting the enhancement to the payment infrastructure and progressively deregulate and liberalize the financial system. more recently, the liberalization to allow for greater foreign participation in the domestic financial markets will create further international linkages for malaysia ’ s islamic banking and takaful industries. as malaysia moves into the next stage of economic development, by transforming from a mainly production - based economy to a more innovation - driven and knowledge - based economy, the financial services sector will play a prominent role in this evolution. in support of this transformation, bank negara malaysia is developing a new blueprint for the financial services sector. this blueprint will chart the next phase of the development of the financial sector, position the financial sector as one of the main catalysts for the transformation of the malaysian economy and ensure our economy remains robust and resilient to respond to any emerging risks. risk management for insurance institutions it is expected that the financial sector in malaysia will expand and become more complex and inter - connected over time. therefore, the corporate governance and risk management practices in insurance institutions will also need to evolve to keep pace with the fastchanging environment. it is a fact that institutions which performed better during the crisis were consistently differentiated by more robust governance and risk management practices. according to a recent towers perrin survey of major u. s. corporations, failure in risk management has been cited to be the key characteristic of financial institutions that suffered large losses during the global financial crisis. thus, improving risk management was the top priority of cfos in reaction to the global