risk strategies. it is for these reasons that bank negara malaysia undertakes rigorous and frequent supervisory engagements with the boards of financial institutions. such engagements are crucial to developing a better understanding of board dynamics and their effectiveness in their governance role. as a matter of practice, prospective directors of financial institutions in malaysia are subjected to close scrutiny through rigorous interviews by the bank. this approach was also recently adopted by the uk ’ s prudential regulatory authority 9. governance arrangements in financial institutions must also be reinforced by a corporate culture which values and reinforces considerations for risk, ethics and compliance at all levels of the financial institution. this starts with the right “ tone from the top ”, whereby the board and senior management shape the core values for the firm. a common theme in the findings across various inquiries into the crisis is a breakdown in culture, where a disregard for prudence and ethics was tolerated. in some cases, individuals bearing red flags were not only ignored, but punished. the financial crisis inquiry commission launched by the us government chronicles two such instances 10. in lehman brothers, the chief risk officer ( cro ) was stripped of her role in risk matters after warning against too much risk in the face of growing pressure to compete against other investment banks. similarly, repeated warnings raised by the business chief underwriter of citigroup against large purchases of defective loans did not translate into action ; instead, he was downgraded in performance reviews and subsequently demoted. another major component in the governance of finance is how individual incentives are influenced through compensation. the global financial crisis offers a telling display of how parliamentary commission on banking standards ( 2013 ). changing banking for good : first report of session 2013 – 14. vol. ii, hl paper 27 - ii hc 175 - ii ( london : hmso ), paragraph 553. guerrera, f. and p. t. larsen. gone by the board? why bank directors did not spot credit risks. financial times 25 june 2008. source : https : / / www. fca. org. uk / static / documents / consultation - papers / cp14 – 13. pdf, paragraph 7. 6. financial crisis inquiry commission ( 2011 ). the financial crisis inquiry report : final report of the national commission on the causes of the financial and economic crisis in the united states. washington, d. c. bis central bankers ’ speeches incentives were misaligned through the widespread adoption of compensation systems that rewarded short - term performance. in the us, loan

mechanisms to assist the public for this purpose. the public is advised to engage both link and akpk for advice on this matter. given the rising potential of technology in various aspects of our lives, consumers should leverage on this opportunity to simplify your daily banking activities. this includes strengthening awareness and closing information gaps on the dos and don ’ ts concerning the use of technology. with this in mind, the banking industry and other government agencies have held several roadshows to educate and assist the public and the business community. do take the opportunity to attend such events. current issues regarding the ringgit exchange rate i would like to take this opportunity today to address current issues regarding the ringgit exchange rate that has garnered considerable attention from fellow malaysians. in 2016, the ringgit depreciated by 4. 3 % against the us dollar. in that year, the ringgit reached the lowest level of rm4. 486 to the us dollar. the ringgit depreciation sparked some concern among malaysians, to the point that it was seen as a reflection of a weakening malaysian economy. i would therefore like to clarify that under a flexible exchange rate regime, movements in the ringgit exchange rate reflects both external and domestic factors, including the strength of the domestic economy and the flow of foreign capital in the financial market. our economy remains resilient with a respectable growth performance within the range of 4 – 5 %, relative to the performance of regional and emerging market countries. the ringgit depreciation is not a unique and isolated event. it is a global phenomenon. the strong appreciation of the us dollar has led to similar depreciation pressures in all global and regional currencies. this is due to several factors including the uncertainties surrounding monetary policy in the us as well as global economic and political developments. these global developments have affected sentiments in global financial markets that led to capital outflows from emerging markets. the currencies of many countries have underperformed and the ringgit was also not spared. the ringgit was affected given the structure of our economy and financial market that is one of the most open among emerging market countries. our market was exposed to global financial market uncertainties that led to the reversal of portfolio investments. there were also other specific factors that affected the ringgit. first, some investors had taken advantage amid the market turmoil and uncertainty to gain profit through speculative activities in the offshore ringgit non - deliverable forward ( ndf ) market. this