financial crisis. prioritizing risk management is even more important for insurance companies. this is due to the fact the core activity of insurance involves risk - taking and risk - transfer, and that insurance risks are usually long - tailed. under the risk based supervisory framework, corporate governance and risk management has always been an integral part of bank negara ’ s supervisory assessment of insurance institutions. to form a supervisory view of an institution, bank negara evaluates how an institution manages the inherent risks within its significant areas of activity. the bank also assesses the quality of the oversight and control functions and tests the resilience of the institutions to different risks under stress conditions. therefore, it is critical for an insurance company ’ s internal policies and control mechanisms to be effective in shaping the desired risk profile. this risk profile should commensurate with the level of capital and capabilities of the company. the bank also initiated, in 2008, the financial institutions directors ’ education ( fide ) program to promote good corporate governance and risk management practices. feedback from the directors who attended the program revealed a deeper appreciation of the importance of sound corporate governance and active engagement of the board in risk management and strategic issues. we have also observed that the practices of financial institutions in malaysia showed evidence of strengthened risk governance culture. in particular, we observed higher commitment by board members, strengthened authority of the chief risk officer ( cro ), and more comprehensive oversight of risks. it is important to recognize that risk management should not be a “ black - box ” discussion that is confined to high level management. risk management should be an enterprise - wide process involving all levels of business functions. the top level management is responsible for putting in place a well - defined risk governance framework and formulating the appropriate risk strategies. at the operational level, the roles of the business units are to ensure that key risks are appropriately identified, assessed and mitigated. we are all aware, therefore, that risk management is a dynamic and iterative process. risk management is not a one - off exercise. instead, it is a continuous cycle. hence, there should be genuine awareness, ownership and accountability of risks throughout the company. every employee should see himself or herself as a risk manager! it is exciting to see the breath of the topics for this conference. and it is even more encouraging to see risk experts from different countries like the united kingdom, hong kong, singapore, philippines and malaysia coming together to exchange information and experience. i am also pleased to

of a single entity in one part of the world on all other connected parties illustrate the tremendous importance of sound and effective risk management in today ’ s financial world. due to the inter - connected economies around the world, asia has not been isolated from the spill - over effects of the global financial crisis. the western economies continued to be bogged down by slow and hesitant recovery with weak economic growth and high unemployment rates. emerging economies, particularly in asia, however, have been resilient through these financial challenges. this is attributable to various policies and practices adopted in the region following the lessons learned from the asian financial crisis in 1997 – 98. on the local front, malaysia has been largely successful in dealing with the challenges brought about by the global crisis. the economy has recovered beginning from the fourth quarter of 2009. prompt government responses and initiatives, as well as the existence of strong macroeconomic fundamentals and a sound financial system are the principal factors. in the first quarter of 2010, most asian economies registered robust growth, with malaysia recording a 10. 1 % real gdp growth. another recent measure of malaysia ’ s resilience is its rating in the imd world competitiveness yearbook 2010. malaysia ’ s global competitiveness ranking improved significantly from 18th place in 2009 to 10th place in 2010, out of 58 economies. malaysia has successfully issued a us $ 1. 25 billion sovereign sukuk ( islamic bonds ) last friday with large international demand even during a period of volatile financial markets. this further attests to malaysia ’ s success as well as international acceptance of malaysia ’ s standing as a major international islamic financial centre. although malaysia fared relatively well during this crisis, we should not be complacent. we should leverage on the lessons learnt from this and the late 1990s crises to improve our resilience to any future shocks. there is at present obvious optimism among financial institutions following the improved economic outlook and market sentiment. it is crucial to ensure, however, that this does not result in unchecked increases in risk appetite or compromises the quality of risk management practices. what was once a “ black swan ” event has increasingly become more common due to the high inter - linkages between international economies. as such, we need to be vigilant and ensure all potential risks are addressed and comprehensive risk management measures are adopted, both at the macro and micro levels of the economy. regulatory reforms in line with risk management let me turn now to the regulatory reforms in line