zeti akhtar aziz : brief overview of the malaysian bond market speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the launch of the rm760 million wawasan bond by the international bank for reconstruction and development, kuala lumpur, 27 april 2005. * * * assalamualaikum warahmatullahi wabarakatuh and good evening mr hiro tsubota, principal financial officer ibrd mr michael bennett, senior legal counsel, ibrd dato'nazir razak, chief executive, cimb mr jeremy oliver, managing director, abn amro bank malaysia berhad representatives from the ministry of finance, bank negara malaysia and the securities commission ladies and gentlemen it gives me great pleasure to accept the invitation to witness the launch of the 760 million ringgitdenominated wawasan bonds by the international bank for reconstruction and development ( ibrd ). the decision to launch this bond in malaysia is reflective of the confidence in the malaysian capital market. this represents another milestone in the development of malaysia's domestic bond market. malaysia's regulatory institutions are committed to the development of the country's bond market to the advantage of borrowers and investors. our financial system continues to be transformed and redefined to become increasingly more diversified, more robust and more competitive. the significant progress achieved in the development of our bond market has been an important part of this process. with the foundations for strong performance in our financial system now being achieved, steps have been initated to implement phased deregulation and liberalisation of the financial and capital markets. this is not only to enhance competitiveness in the malaysian financial markets but also to strengthen its international integration, thereby facilitating our economic inter - linkages with the global economy. as part of this process, bank negara malaysia on april 11, 2004, liberalised the foreign exchange administration rules to permit multilateral financial institutions and multinational corporations to raise ringgit - denominated bonds in the malaysian capital market. the recent liberalisation of the foreign exchange administration rules on 23 march 2005, has also eliminated remnants of the restrictions on investors and greatly enhanced access to the malaysian domestic market. the malaysian foreign exchange environment is now by far, much more liberal than that existing prior to september 1998. to make the malaysian capital market more competitive, the government of malaysia has also exempted non - residents from paying withholding tax on investments in such ringgit bonds issued in malaysia. infrastructure

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