. it helped to calm the financial markets and it was well understood. interest rates are falling in several countries, in particular in italy. is this something that the ecb is concerned about? we are concerned about a combination of problems : a deep recession, a huge impact on public finances and an increase in funding needs. this causes tension in the financial markets and, in particular, the government bond market. we are going to remain vigilant. as we have said on several occasions in the recent past, we are not going to allow any fragmentation of the bond market and we will act accordingly. we have a new instrument – the pepp – and we can use it flexibly in terms of timing and the assets we purchase. that ’ s why i hope we can deal with this situation. am i to conclude from your comments that the ecb is prepared to strengthen the programme or take other measures in order to respond to any tensions that may arise? we have a programme that we are implementing. the ecb ’ s governing council has not made any decisions regarding further programmes. we are keeping an open mind in terms of how to respond to further developments and tensions within the markets. because we are completely committed to maintaining stability in the financial markets and to avoiding the fragmentation that could prevent the functioning of the monetary policy transmission mechanisms. in countries such as portugal, spain and italy, people are concerned that we could see another crisis, like the sovereign debt crisis in 2010 – 11. can the ecb confirm that it will do all that is needed to avoid such a scenario? we have shown our commitment, with liquidity, by making capital requirements for banks more flexible and with the asset purchase programme. we are extremely committed. the current crisis is quite different to the one we saw in 2010 – 11. it did not originate in budgetary issues or the banking system. it was a massive exogenous shock. this is a health emergency which has become an economic problem. our current efforts are focused on preventing it becoming a debt crisis. are banks in europe better equipped to deal with this crisis than in 2008? or can we expect to see banks fail in various countries? things are very different to ten years ago. banks have more capital, they have more liquidity and are more resilient. the bigger concern is profitability, which was already low. european banks are solvent but i am aware that this crisis will have further impact on their profitability. in the medium term, banks

zeti akhtar aziz : monetary and financial policies in the asian network economy introductory remarks by dr zeti akhtar aziz, governor of the central bank of malaysia, at the tun ismail ali chair public lecture by datuk seri panglima andrew sheng on “ monetary and financial policies in the asian network economy ”, kuala lumpur, 18 april 2006. * * * introduction let me first of all welcome you to the tun ismail ali public lecture for 2006. this public lecture is part of a series of events organised in conjunction with the tun ismail ali chair in monetary and financial economics at the university of malaya. the chair was established by bank negara malaysia in august 2000 to commemorate the contributions of the late tun ismail mohamed ali, the first malaysian governor of bank negara malaysia. it is our hope that this chair would contribute to the advancement of new ideas and knowledge in the area of monetary and financial economics. today, we are indeed honoured to have datuk seri panglima andrew sheng, holder of the tun ismail ali chair for 2006, to speak to us on " monetary and financial policies in the asian network economy ". this occasion is particularly meaningful because andrew was with bank negara malaysia for many years, from 1976 a€ “ 89, and during that period, he had worked closely with the late tun ismail ali. ladies and gentlemen, the theme for today's public lecture : " monetary and financial policies in the asian network economy " is indeed timely and highly relevant, in the current regional and global environment. the asian economies have always been highly integrated into the global economic and financial network. indeed, the success of the asian economies lies essentially in its ability to be highly networked. the nature of these networks however, has evolved over time, heightening the complex nature of the interlinkages. in this recent decade, this trend is being reinforced by the intensification of regional integration. it is being facilitated by increased liberalisation and the increased potential for complementarities in the region. it is also driven by the conscious efforts by the authorities to facilitate the integration process. this is premised on the potential for increasingly mutually reinforcing positive outcomes. there is a growing recognition of the need for enhancements to the institutional arrangements and regulatory and legal framework to better manage the risks and vulnerabilities associated with the network economy. in this regard, an enhanced understanding of the changes in the way financial markets and payment systems operate in a more connected environment becomes important