energy markets. turning to how movements in energy prices feed into inflation. although household energy costs make up a fairly small share of the cpi basket, as we all witnessed last year, large movements in energy prices can have a material impact on headline inflation. energy price changes also have an indirect effect through firms ’ input costs. large and more persistent changes in energy prices may limit firms ’ ability to absorb such large cost increases via lower profit margins. the pass - through from firms ’ input costs, and ultimately to consumer price inflation, may then be amplified. large and more persistent energy price changes could also amplify second - round effects, for instance by affecting inflation expectations. recent research, both at norges bank and elsewhere, has documented that household inflation expectations play a key role in amplifying the pass - through of oil price shocks to inflation. this is particularly the case when oil price changes are large and persistent. on the other hand, and contrariwise, at least some of the pass - through to core inflation will be counteracted by the disinflationary effect of lower real income and a fall in demand. [ 3 ] if households expect energy price increases to be temporary, they will seek to smooth their consumption by borrowing more or reducing their savings. however, many households are credit constrained or consume mainly out of current income, leaving them unable to smooth their consumption. larger and more persistent energy price movements could therefore potentially amplify the contractionary effect on consumption. let me move on to the implications for monetary policy. first : central banks need to increase their knowledge about energy markets and integrate that into our analyses. the effects of and efforts to combat climate change might change the structure of our economies in ways that reduce the relevance of models based on historical data. furthermore, as my fellow panelist prof. baumeister has highlighted, it is important to identify the original source behind the energy price movements in real time. this may become more challenging as the green transition involves a wide range of sectors and products. to help us navigate we might need new analytical tools and new models. second : central banks are not unfamiliar with fluctuations in energy prices, but should the frequency and persistence of supply shocks increase ahead we may more often be faced with the challenging short - term trade - off between stabilising inflation and promoting high and stable employment. deciding on the right timing and dosage of monetary policy will be crucial. the appropriate response of monetary policy to energy prices depends on the

encik abu hassan alshari yahaya : anti - money laundering and combating the financing of terrorism welcoming remarks by mr encik abu hassan alshari yahaya, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the asean regional bank supervision workshop on “ anti - money laundering and combating the financing of terrorism ”, kuala lumpur, 3 march 2015. * * * welcome to malaysia. i hope you have had a pleasant journey travelling to kl and managed to have a good rest. i also hope that the facilities being offered here at our lanai kijang are adequate to meet your expectations. it is a great honour for bank negara malaysia to host and co - organise the asean regional bank supervision workshop on anti - money laundering and combating the financing of terrorism. i would like to take this opportunity to thank the world bank for formulating the programme and organising this workshop and our utmost gratitude to the government of canada for the generous financial support that has made the hosting and organizing of this course possible. as a country that has just gone through its on - site mutual evaluation process, we have seen that the role of supervision is very important in the development of a country ’ s aml / cft regime. there is critical need for the integration between aml / cft, prudential and business conduct supervision as well as between those supervisors and the law enforcement authorities. these inter - linkages prove to us that collective effort is key in combating ml / tf effectively. the international standards require supervisors to appropriately supervise, monitor and regulate financial institutions for compliance with aml / cft requirements commensurate with their risks. as such, to effectively implement the above, a country ’ s aml / cft supervision has to be embedded in the broader framework of prudential and business conduct supervision. this is to leverage on and optimise the synergies, expertise and resources to ensure effectiveness of both overall supervision of financial institutions and specific aml / cft supervision. supervisors are required to ensure effective management of ml / tf risk and compliance with aml / cft requirements by the financial institutions by assessing institution ’ s policies, procedures and processes for identifying and managing ml / tf risk and in complying with regulatory requirements. this integration also ensure that supervisors are coherent and apply high standards in fulfilling their responsibilities for both aml / cft and prudential supervision. as for aml / cft