aznan bin abdul aziz : banking and esg revolution – going beyond aspirations closing remarks by mr aznan bin abdul aziz, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the aicb - abm 2nd malaysian banking conference, kuala lumpur, 27 june 2023. * * * y bhg tan sri azman hashim, chairman of the asian institute of chartered bankers ; y bhg dato khairussaleh ramli, chairman of the association of banks malaysia, vice chairman of aicb and group president and ceo of maybank group ; esteemed guests, ladies and gentlemen assalamualaikum and salam sejahtera it's past 5 pm. and i have the unenviable job of keeping you from leaving after a highly productive and packed day. it is simply incomplete to adjourn without the regulator relaying its thoughts and expectations. i understand that the day started with a focus on where we, as a country, are in the climate journey. we know that 2050 is the year – the earliest point by which malaysia aspires to reach net zero ghg emissions. many significant policies are now either in place or are due to be finalised soon to get us to 2050. these include key frameworks and roadmaps for malaysia to transition such as the long - term low emissions development strategy ( lt - leds ), nationally determined contributions roadmap ( ndc roadmap ) and national energy transition roadmap ( netr ). these policies will enable yourselves and your clients to better align your transition plans. for the international community, these policies provide a clear signal on the country's seriousness about 2050, despite contributing only 0. 7 % of global ghg emissions. along the transition journey, there are risks to manage, and opportunities to be seized. technology is key. so is finance. your actions and responses are critical. the partnership between you and your clients is critical. your clients would need the " how " in terms of new forms of financial instruments – transition finance, adaptation finance and blended finance to name a few. for the smes, this goes beyond financing. for instance, they need the " how " in terms of where and how to begin greening their operations, tools to help them understand, measure and track their own emissions profiles. i am delighted and encouraged to see the malaysian ecosystem and accompanying tools continue to mature. the progress thus far is

( dodd - frank act ), the federal reserve has been working with the federal deposit insurance corporation ( fdic ) to improve resolution planning by banks. through thoughtful resolution planning, firms can reduce the risk that their failure would have disruptive effects on the financial system and the economy. the resolution planning process has caused the largest u. s. banking firms to substantially improve their internal structures, governance, information collection systems, and allocation of capital and liquidity in ways that both promote resolvability. the federal reserve also has helped improve the resolvability of the largest banking firms by requiring u. s. g - sibs and the u. s. intermediate holding companies of foreign g - sibs to meet long - term debt and total loss absorbing capacity ( tlac ) requirements. effect of regulation on u. s. banks evidence overwhelmingly shows that financial crises can cause severe and lasting damage to the economy ’ s productive capacity and growth potential. 1 post - crisis reforms to financial sector regulation and supervision have been designed to significantly reduce the likelihood and severity of future financial crises. we have sought to accomplish this goal in significant part by reducing both the probability of failure of a large banking firm and the consequences of such a failure were it to occur. we have substantially increased the capital, liquidity, and other prudential requirements for large banking firms, and these increases are not free. stronger capital requirements increase bank costs, and at least some of those costs are passed along to bank customers. but in the longer term, stronger prudential requirements for large banking firms will produce more sustainable credit availability and economic growth. our objective should be to set capital and other prudential requirements for large banking firms at a level that protects financial stability and maximizes long - term, through - the - cycle credit availability and economic growth. guiding principles to simplify and reduce regulatory burden as we near completion of the major post - crisis regulatory reforms, this is a good time to assess the effectiveness and efficiency of these reforms. several principles are guiding us in this effort. 2 / 5 bis central bankers'speeches first, we should protect the core elements of the reforms for our largest banking firms in capital regulation, stress testing, liquidity regulation, and resolvability. second, we should continue to tailor our requirements to the size, risk, and complexity of the firms subject to those requirements. in particular, we should always be aware that community banks face higher costs to meet complex requirements. third