5 bis central bankers'speeches mechanisms such as guarantee and insurance in addition to financing, it has attracted the private sector as co - investors and guided the financial institutions to develop capacity in risk management of renewable energy projects. this demonstrates that with in - depth understanding of the sectors they are serving, dfis can design solutions which achieve the desired impact, whilst crowding in private capital. key message 2 – performance measurement framework anchored on developmental objectives will ensure alignment of business strategies to deliver the highest value my second point relates to adopting a performance measurement framework for dfis that is anchored on development objectives. this is to ensure alignment of business strategies to deliver the highest value to society. dfis play an important role in bridging financing gaps by participating in markets not adequately served by the private sector. these are often developing sectors and markets which are characterised by high risks and uncertainties. therefore, by extension, we cannot evaluate dfis using mere financial indicators as they are not adequate to capture the contributions of dfis to the wider economy and growth of the nation. dfis must also be measured by the additionalities they create. in my view, a dfi can be deemed to be successful when its participation addresses market failures and brings high value addition by : ( a ) influencing project design and delivery in a way that will generate employment, increase income levels and welfare of targeted sectors, expand tax revenues and multiply economic spillovers ; ( b ) crowding in or attracting private investments or financing in new growth sectors / markets through innovative financial structures ; and ( c ) creating an enabling environment for economic segments to flourish by actively contributing to the sound design and implementation of public policies. the difference in measuring the success of the dfis means that it is important to have a structured and comprehensive performance measurement framework. this framework must be anchored on developmental outcomes to create strong incentives for strategic alignment to achieve greater development impact. for example, the bancoestado of chile has for the past 4 years published integrated reports which are called the “ social footprint of bancoestado ”. they showcase the achievements of the bank ’ s development impact in terms of meeting the sdg agenda. bancoestado embeds relevant sdgs and developmental kpis in their performance measurement framework. they are then hardwired into key decision making processes to ensure productive and effective allocation and distribution of resources aimed at meeting the development objectives. similarly, performance measurement of development impact is the backbone of findev canada,

proportionality however, does not necessarily mean less stringent regulations. for some institutions, it may mean lower leverage, additional safeguards and prudential measures. thus, proportionality entails an adjustment to the complexity of the rules taking into account the risks and externalities posed by financial institutions. it is important to understand that this does not necessarily result in a lower degree of stringency. this practice is not entirely new as we have been practising proportionality in regulating dfis. this is reflected in prudential regulations on capital and liquidity which are applied to dfis as well as corporate governance and financial reporting requirements. moving forward, this application of proportionality will be further enhanced to reflect developmental outcomes. the bank is refining its methodology for dfis to support greater differentiation at the individual institution level based on the nature, size, complexity and most importantly, the unique roles and mandates of each dfi. prudential and conduct standards applicable to dfis will also continue to be renewed and adapted where relevant. the balance that we aim to strike can only be achieved if dfis also lift their game to ensure strong internal controls and risk and performance management. in addition to proportionality, a related issue is the need to review the overall dfi landscape in a holistic manner. an important step towards steering the dfis forward will be to conduct a review on the mandates of the dfis. since the establishment of the dfis in malaysia more than four decades ago, their mandates have remained largely unchanged. periodic mandate reviews are important especially in a country like malaysia where there is rapid economic growth and structural change as the country moves from one stage of growth to another. mandate reviews will not only identify gaps within the economy that dfis can play a meaningful role, but to reduce areas which overlap with each other and other players in the financial sector. for the immediate future, there are pockets of financing gaps particularly in the new and emerging sectors that the dfis could support. examples of these areas are : the high4 / 5 bis central bankers'speeches end services and advanced manufacturing sectors, as well as knowledge or technology - based sectors including green - tech and biotech industries. these are key drivers that will accelerate the transformation of malaysia into a high - income economy in a sustainable and inclusive way. last but not least, as part of the holistic review, we should be prepared that some dfis may have to “ graduate ”