fair and responsible market practices and conduct, and that consumers are better equipped with the necessary financial knowledge to make informed decisions. recognising that the development of the financial sector also depends on the availability of high quality and skilled talent, focus was accorded to the development of human capital through the introduction of institutional arrangements to provide comprehensive education and learning programmes for the financial services industry. towards this objective, the central bank oversaw the establishment of differentiated platforms to meet the diverse needs of financial services professionals, from the entry to middle management, specialist and leadership levels. these include the setting up of programmes and institutions such as the financial sector talent enrichment programme, the iclif leadership and governance centre and inceif, the global university of islamic finance. malaysia ’ s imperatives for growth and stability moving forward our next phase of transformation will continue to promote inclusive access to financial services, encourage the development of the range of financial institutions, products and markets that will facilitate and drive the development of new domestic sources of growth, and accelerate malaysia ’ s regional and international connectivity. the use of technology will also be leveraged in this new environment, to enhance the efficiency of financial transactions through electronic means. the implementation of these strategies will also be accompanied by an effective regulatory and supervisory regime that is appropriate for a more regionallyand internationally - connected financial sector. there has been tremendous payoffs from the development of our financial system, its restructuring, rationalisation, deregulation and subsequent liberalisation. during the recent global financial crisis our financial system has remained resilient. credit flows to support the economy was never disrupted. despite the massive and highly volatile capital flows, malaysia was able to intermediate these flows. there continued to be orderly functioning of the financial markets and the overall financial system. in conclusion, the outcome and success of any reform strategies will depend on the prevailing circumstances and the state of readiness of the financial system and the overall economy. as china undertakes its own reforms, it has every potential to emerge stronger and to continue its economic success that is now a well recognised milestone of this century and for the years to come. bis central bankers ’ speeches

systemic risks associated with banking activities, without being subjected to the same rigor of regulation and supervision that is applied to banks. in this recent decade, the strengthened institutional arrangements in malaysia to promote financial stability have contributed towards addressing this important gap. they include the establishment of an oversight authority for credit cooperatives, and provisions for the malaysia deposit insurance corporation to extend temporary deposit insurance coverage to instruments of non - bank intermediaries that are similar in nature to deposits. also important has been the significant strengthening of inter - agency coordination arrangements to address potential regulatory gaps. the new legislation has also improved the ability of the bank to respond to financial stability risks that can originate from shadow banking activities, including to issue orders requiring such intermediaries to address any risk identified which could threaten financial stability. a financial stability executive committee chaired by the governor, which includes the treasury secretary, heads of key regulatory authorities and independent parties as its members may impose macro - prudential measures on these non - bank financial institutions to prevent the build - up of financial imbalances from this sector. with these necessary preconditions firmly in place, malaysia embarked on a gradual and sequenced approach towards liberalisation and internationalisation. in 2005, malaysia migrated to a flexible exchange rate regime at the very same moment that china did. it has provided malaysia with greater flexibility to adjust to changing structural conditions in the region and the global economy. this has been reinforced by the progressive liberalisation of foreign exchange administration rules which have enhanced business competitiveness and facilitated larger volumes of trade and foreign direct investment flows. this has generated greater two way flows in the foreign exchange market and thus promoted orderly conditions in an environment of highly volatile capital flows. in the financial sector new licences and foreign equity interests in the banking and insurance sectors have now moved beyond the prescription of hard limits, to assessments based on the prudential and in the best interest of malaysia criteria. in building a stable and resilient financial system, the central bank has accorded greater emphasis on financial inclusion. this has included enhancing access to the unserved sectors as well as the introduction of highly innovative delivery channels such as retail outlets and post offices as third - party agents to widen the outreach of financial services. these have worked in tandem to ensure that all members of society, including the most vulnerable groups, have the opportunity to participate in the formal financial system. concurrently, continuous efforts are being undertaken to promote consumer protection and education, in bis central bankers ’ speeches order to ensure