derivatives association ( isda ) has consulted widely on this issue, 2 and concluded that market participants would prefer the historical median approach, with an adjustment spread based on five years of data. 3 this method would be robust against data outliers resulting from unusual market conditions, as well as potential manipulation. 4 consequently, this method was adopted in cash and derivatives markets in the united states, united kingdom and many jurisdictions that were impacted by the london interbank offered rate ( libor ) transition. 2 / 5 bis - central bankers'speeches nonetheless, in south africa, market participants are not only concerned about dealing with data outliers ; they are also concerned about structural shifts in the behaviour of the jibar, especially since the sarb's migration to a surplus system for implementing monetary policy in june 2022. it appears that this reform has squeezed liquidity premiums, in that the spread between zaronia and jibar has narrowed somewhat. the mpg is currently finalising its work on the adjustment spread methodology to ensure that the chosen methodology considers all the idiosyncratic factors that would concern market participants. it is also important for market participants not to over - rely on fallbacks to facilitate legacy jibar referencing contracts. the best way to minimise risks would be to actively migrate to zaronia referencing contracts as soon as practicable. 5 there will nonetheless be instances where, despite best efforts, it may not be possible to transition or adjust certain contracts before jibar ceases. these so - called tough legacy contracts will require regulatory measures to facilitate their transition. as such, it may be necessary for the mpg to consider a synthetic jibar, similar in structure to the current forward - looking jibar, to minimise the impact on systems and processes. furthermore, the mpg, the sarb and the financial sector conduct authority will consult with national treasury on the appropriate regulatory instruments for ensuring contract continuity and safe harbour provisions for the protection of contract parties, supervisors and the benchmark administrator. building a new foundation shortly after the mpg conference in april 2023, the remaining us dollar libor panels were discontinued. this concluded a massive decade - long global project to replace libor. 6 reflecting on this effort, the co - chairs of the financial stability board's official sector steering group, nikhil rathi and john c williams, concluded that it had been like building a new foundation under an existing home – an undertaking of extreme difficulty, one many doubted would succeed, and

the board of directors and management. the policy on shareholding will therefore be enhanced to promote greater shareholder activism within banking institutions. shareholders need to be concerned with the practices of banking institutions, particularly those which can have adverse implications on depositors'interests and on financial stability. similarly, given the increasingly competitive environment, advancement in risk management practices and the strengthened corporate governance framework, a more flexible policy framework on lending to connected parties will be put in place. however, to prevent abuses of such flexibilities, there will be safeguards and conditions that need to be observed by banking institutions. ladies and gentlemen, the adoption of a principle - based regulatory approach will provide banking institutions with greater flexibility in deciding on strategic options in a more competitive environment. as the banking industry grows at an accelerating pace, there are common areas where collective efforts by the industry will not only bring benefits to the financial sector but also to the overall economy. in this regard, there is an increasing trend among developed countries such as the united kingdom, canada, and australia, where the bankers associations have an important role in spearheading initiatives to promote high standards of ethical code of market conduct to meet consumers'rising expectations and demands. the bankers associations have increasingly assumed the role as a focal point for consultation with not only the regulatory authorities, but also by the other stakeholders on policies affecting the financial sector. in this respect, such associations have played an important complementary role to the regulatory authorities'efforts in promoting a more progressive, dynamic and resilient banking system. in addition, banking associations in these countries have also acted as the voice for the industry in articulating the position of their members to promote the interests of the industry. in malaysia, there are several areas of common interest to the industry which the associations can spearhead. it is, therefore, to the benefit of the industry to reassess the role of the associations with respect to taking forward common initiatives and interests of the industry. ladies and gentlemen, moving forward, consumer and sme financing will continue to be two important areas of growth. the overall macroeconomic and interest rate environment would continue to be supportive of growth in these two sectors. the challenge for banking institutions is to ensure that consumers and the businesses have access to a wide range of products, while at the same time ensuring that the necessary infrastructure is in place to manage risks arising from these businesses. this is to ensure that lending to these sectors would be sustainable and avoid the risks that have recently been experienced in