a flow on of international forces. they were not mainly a result of local factors. but it is appropriate, in our judgment, to foster confidence to the extent we can during periods of global stress such as we have been experiencing. despite those actions, a financial system such as ours cannot be entirely insulated from these global events and, inevitably, the australian financial system has been affected to some extent. the rise in the wholesale cost of term funding has meant that many non bank and some bank lenders have had to slow the growth of their businesses. the closure, more or less, of securitisation markets for the time being also has made life much more difficult for those lenders which relied heavily on that avenue of funding. capital market raisings are much more difficult for some corporates as well, and many of these entities are turning to their bankers. by and large, the major banking institutions have been able to provide support for sound borrowers, and have stepped into the gap left by the withdrawal of funding from the capital markets. they have been able to do this because of their own balance sheet strength, something which is clear from the analysis in the bank ’ s recently released financial stability review. while some of their customers have been excluded from capital markets of late, banks have themselves been able to access segments of the capital markets in sufficient quantity to keep their balance sheets expanding. this has come at a time when wholesale funding costs have been rising by more than the official cash rate, and that has been passed on to end borrowers, while conditions on lending for some borrowers have tightened in response to higher perceived risk. but this outcome is preferable to the alternative of lending drying up. at present, the international environment remains very difficult. the us economy is experiencing very subdued conditions, as the weakness that had for some time been confined to the housing sector has spread to other areas over recent months. losses incurred by major international financial institutions associated with previous risky lending have continued to come to light, even during this week. valuing certain classes of assets remains very difficult and some quite sound assets appear to be priced currently at less than their likely underlying value. a process of deleveraging is continuing among hedge funds and other complex financial vehicles, as the retreat from risk by their lenders forces a winding in of positions. while all this has been occurring, participants in financial markets have understandably remained very nervous, and day to day volatility in a range of markets has been much

be considered as critical elements of modern living. financial institutions also play an important role in the housing market through the provision of financing. the effective intermediation role of financial institutions is equally critical for a wellfunctioning housing market. in the provision of financing, financial institutions need to ensure that they lend responsibly to those who are deserving, capable and able to repay. financial institutions need to protect the public interest by ensuring that buyers do not borrow beyond their means and fall into financial hardship. to this end, the financial institutions should also continue to provide effective and transformative financial services to ensure that society at large would benefit and thus, improve their quality of life. i take note that there are a few interesting sessions during this conference related to innovations in finance, including one on fintech. at the recent release of the 2018 financial stability and payment systems report, bank negara malaysia reported that financial institutions in malaysia will continue to support economic activity, including to households for affordable housing. loan disbursements and net financing to households grew healthily last year by around 6. 7 % and 4. 7 % respectively. the approval rate stood at 71. 3 %, with around 70 % of loans for first time buyers of properties priced below rm500, 000. finally, for policymakers, our role is to continue pursuing greater coordination with the private sector to build a sustainable housing market. in malaysia, various initiatives have been announced to support this agenda, including the launch of bank negara malaysia ’ s fund for affordable homes, the national home ownership campaign, stamp duty exemptions and provision of mortgage guarantees and rent - to - own schemes. while we are seeing a gradual rebalancing of housing supply towards the more affordable segments in malaysia, it is important that future supply is tailored to the needs of future demand. as such, moving forward, it will be critical for malaysia to accelerate the establishment of an integrated housing database. the database would be important to provide timely information to help build an efficient housing market through greater transparency and lead to better planning by policymakers and developers. the newly established single authority for affordable housing should play a proactive and strategic role in managing affordable housing in malaysia. local authorities and developers should also work together to reduce the cost of building houses. last but not least, there is a need to build a healthy rental market. policymakers need to be clear that the drive for affordable housing is not necessarily equivalent to the drive for “ home ownership ”