procedures and frameworks, making it challenging to coordinate actions and align strategies. financial institutions must therefore ensure their recovery and resolution plans fully account for their overseas operations and intra - group dependencies. given the global nature of many institutions, risks in one part of the group can quickly affect other areas across borders. to mitigate this, it is essential for financial institutions to clearly define the arrangements between subsidiaries during times of stress. proactively identifying and addressing these dependencies is key to strengthening crisis management. effective communication strategies are equally important when managing crises that involve overseas operations. institutions must carefully plan how information is relayed within the group and to shareholders. it is crucial to maintain public confidence, ensuring that communication is clear, consistent, and avoids creating unnecessary panic. better coordinated cross - border communication can significantly reduce the potential for confusion or misinformation during a crisis. on the regulators'end, authorities have been leveraging on the executives'meeting of east asia - pacific central banks ( emeap ) platform which has established the crisis management and resolution framework in 2013 to further improve crisis communication and coordination among member countries. ladies and gentlemen, malaysia's approach to recovery and resolution planning will continue to be both proactive and adaptive, and an important priority in our ongoing efforts to promote a resilient banking sector. 4 / 5 bis - central bankers'speeches there is much work left to be done. for instance, on the regulatory front, bank negara malaysia is cognisant of the importance of liquidity funding during stressful operating environments. we are exploring ways to enhance our liquidity assistance framework, by broadening the range of acceptable collateral during stressed periods and improving the time taken to value such collateral. another example is resolution planning for nonmember institutions of pidm such as investment banks. it is perhaps timely for us to reflect on the applicability of the resolution framework for non - member institutions. this would ensure that all institutions, regardless of membership status are adequately prepared to manage potential crises. we will continue to work with industry and other relevant stakeholders on such initiatives. in closing, i would like to extend our sincerest gratitude to pidm for their tireless efforts in the area of crisis preparedness. their contributions have been instrumental in bolstering our recovery and resolution capabilities, helping us build a stronger and more resilient financial system. together, with continued collaboration and dedication, we will ensure that malaysia remains well - prepared to navigate any challenges that lie ahead

ability to anticipate, manage and mitigate the impact of crises. internally, within bank negara malaysia, we are continuously enhancing our ability to respond effectively to crises. this involves understanding the financial landscape and 1 / 5 bis - central bankers'speeches vulnerabilities within the system and taking corrective actions towards improving them. a key aspect of this includes ensuring that our prudential frameworks, such as riskbased capital requirements and proportionality in regulation, remain robust and adaptive to the changing environment. along the spectrum of crisis preparedness initiatives, recovery planning stands out as the primary line of defence for financial institutions to handle stress beyond their risk appetite. for this reason, bank negara malaysia views financial institutions'recovery plans as a critical element in elevating crisis preparedness of the banking system. the submission of the first recovery plan from banks last year is an important step forward in the industry's commitment to being crisis ready. but our journey is just beginning. the end game is not the plan, but rather, everything that goes into ensuring that the plan is credible and works when needed. in other words, careful planning rather than the plan itself is what ultimately provides confidence in the ability to respond to and recover from crises. industry must therefore continuously review and refine their recovery plans. institutions should consider if these plans on paper can be operationalised in a timely manner and understand how they interact with the rest of the financial system to ensure risks are properly identified and mitigated. in this regard, experience from past crises may provide useful insights. by analysing past crises, financial institutions can identify weaknesses in their recovery plans and refine their strategies accordingly. for example, the market reactions to decisions made by regulatory authorities during the 2023 banking turmoil in the us and europe provide invaluable insights into the feasibility of various recovery options. the recent crisis has also raised concerns on the effectiveness of loss absorbing capital including the treatment of credit hierarchy. australia has recently proposed to phase out additional tier 1 capital instruments to be replaced with more stable and reliable capital. in malaysia, these instruments account for less than 5 % of total tier 1 capital. we will continue to respect the creditor hierarchy of claims and monitor further developments in this area. another key lesson from the recent banking crisis is the critical importance of transparency and timely communication. financial institutions must prioritise clear and consistent communication with stakeholders to maintain trust and stability especially during periods of uncertainty. now, as we strengthen