and act pre - emptively to avert risks to financial stability will also be further enhanced when the new central bank of malaysia act 2009 comes into force on 25 november 2009. this includes the expanded powers for the bank to undertake surveillance and prompt resolution on financial institutions including on non - regulated institutions that are systemically important. as we continue to refine our approaches, and develop a better understanding of market behaviours, financial institutions will also need to better integrate institutional risk assessments with macro - economic developments. international reforms have also focused on delivering fair outcomes for consumers. in relation to this, the bank will continue to ensure that financial innovations are developed to meet the real needs of consumers and businesses, and do not expose the system to excessive risks. ongoing efforts to strengthen avenues for consumer redress will continue through the establishment of a financial ombudsman and improved product transparency, particularly in the area of pricing, commissions, fees and charges so as to support more informed consumer decisions. timelines for some of these measures have already been announced. these reforms will be reinforced by strengthening further the current consumer protection framework to address mis - selling practices and facilitating a more effective enforcement of business conduct regulations. strengthening the domestic infrastructure for financial stability an important part of the efforts to strengthen the domestic infrastructure for financial stability is legislative reform. the bank is in the process of drafting a new legislation that will amalgamate existing legislations governing financial institutions and intermediaries in malaysia that are administered by the central bank. provisions in the current banking, insurance and takaful laws will be updated to support a more differentiated regulation and supervision according to risk. it will also reinforce the emphasis placed on effective board oversight and enable pre - emptive supervisory and enforcement actions by the bank. this will include the introduction of a broader and more flexible enforcement framework, with consideration to civil and administrative penalties to deal with different types of offences. proposed legislative changes also include the introduction of a more comprehensive insurance compensation system for the protection of policyholders. the draft legislation is expected to be completed in 2010. progressive liberalisation of the financial sector this year marks the ninth year into the implementation of the financial sector masterplan. following the release of the plan in 2001, more than 90 % of the recommendations in the plan have been implemented. collectively, these measures have contributed towards achieving a more efficient, effective, stable and resilient financial sector as was envisioned in the masterplan. this is evidenced by the significant transformation of the financial system

. asia will be very much part of this new future that is emerging. as asiaa€™s importance as a growth centre in the world economy increases, three major trends can be expected to intensify going forward. first, domestic demand, supported by the large and fast - growing middle income and young population in the region, will increasingly have a greater role in driving economic growth in asia. this would contribute towards a greater balance between domestic and external sources of growth. second, the diversification of external markets will accelerate, towards greater economic inter - linkages with emerging economies in other parts of the world. part of this trend includes the creation of the asean economic community by 2015 in which asean will transform into a single market with free movement of goods and services. this will include the lifting of restrictions to the flow of capital in the region. and third, is the greater financial integration within asia that will result in an increased part of the savings in asia being reinvested in asia. the new spending patterns as incomes rise in the region will drive the modernisation of the retail sector across the region. financial services to the household sector will become increasingly important in this new environment. reforms to pensions and retirement benefit systems will be key to providing a more comprehensive social safety net, thus reducing the need for high precautionary savings and encouraging consumption. in addition, the large trade sector in asia and large capital investments required to move towards higher valueadded activity will also provide an expanding market for financial services. the more regionally integrated financial system will allow firms and investors increased options in the regional financial markets for financing and investment. these trends are being further supported by enhanced linkages in the payment systems to facilitate the intermediation of funds in the region. the economic transformation of malaysia will move us to the next level of development. malaysia has been a middle income country for almost three decades, having benefited considerably from rapid industrialisation and integration with the global economy. moving into the next stage of economic development, the domestic economy will change to a productive structure that is more innovation - driven and knowledge - intensive, with the services sector assuming an increasingly dominant role in the economy. in this next decade, the services sector is expected to account for about two thirds of the economy, with growth focused on higher value added activities. to support and drive this transformation, a new blueprint for the financial services sector is being developed by bank negara malaysia. the blueprint will chart the next phase of the