balance channel. let me explain how in principle that channel operates. as we buy assets, investors are likely to substitute the lower risk assets we buy with riskier assets such as longer - term assets, equities and possibly real estate. this has well - known effects on interest rates across the curve, on the cost of capital, on wealth – via higher equity and real estate prices – and therefore on balance sheets more generally. there are certainly question marks as how strong these effects are in the euro area. we do not have precedents and therefore empirical data for an economy such as ours, which has a different financial structure from the us or japan. but there is no question as to the sign of the effects – it is clearly positive. indeed, given our relatively greater reliance on banks as a source of finance, these balance sheet effects could work particularly through the bank lending channel. on the bank side, rising asset prices would free up capital resources for additional lending. while on the side of firms and households, an improvement in net worth, combined with a general improvement in economic prospects and hence future earnings, can expand their capacity to borrow. substitution of assets can also take place across jurisdictions, which would take the form of investors rebalancing portfolios away from euro - denominated assets towards other jurisdictions and currencies providing higher yields. bis central bankers ’ speeches for example, there is evidence that both the various large scale asset purchase programmes of the fed as well as the bank of japan ’ s quantitative and qualitative easing programme led to a significant depreciation of their respective exchange rates, even in a situation in which long - term yields were already very low, as in japan. finally, through these portfolio balance effects the central bank can also expect to have a strong signalling effect. they signal that we will use all means available to us, within our mandate, to return inflation towards our objective – and without any undue delay. this in turn helps anchor inflation expectations and thereby lower real interest rates, boosting activity and inflation. this is also a channel that was operative in the us and japan. both economic theory and international experience suggest that the magnitude of portfolio balance effects is a function of the size of the central bank ’ s balance sheet. as this effect stems from the displacement of portfolios, it is logical that the greater the purchases, the greater the displacement across asset classes. this is why the governing council has communicated its expectation that the combination of all the decided

of fatf, malaysia holds itself to the highest levels of integrity in adhering to international aml / cft / cpf standards. as we all know, crimes today transcend borders, and in response to this, malaysia has also forged and maintained strong relationships with our foreign counterparts, particularly where intelligence - sharing and investigations are concerned. additionally, our aml / cft / cpf regime is anchored by a robust surveillance system, which in turn helps ensure the effectiveness and timeliness of enforcement actions by the relevant law enforcement agencies. 1 / 4 bis - central bankers'speeches on this note, in 2023, bank negara malaysia ( bnm ) had undertaken a total of 291 supervisory and enforcement actions on financial institutions, and forfeited assets from illegal activities amounting to approximately rm 11 million. the financial intelligence unit of bnm had also shared financial intelligence with domestic law enforcement agencies and more than 50 foreign fius, with 71 % of these disclosures related to highrisk crimes. we do not, and cannot, combat financial crimes alone. indeed, our regulatory and enforcement counterparts have played an equally critical role in this respect. the malaysian anti - corruption commission, or macc, for example, has made important and significant progress in graft - busting, including the opening of a total of 776 investigation papers, resulting in 869 arrests and a total of 326 charges brought to court between january and august 2023. our counterpart, the commercial crime investigation department of the royal malaysia police has also charged a total of 4, 880 cases in court between january and april 2024. these efforts are reflective of malaysia's keen determination to combat financial crimes and preserve the integrity of our financial system. while we have made commendable progress, we should not be complacent. ml / tf / pf risks continue to evolve, and if we let our guard down, it will pose serious threats to our financial system, our economy, our society, and our country. on that note, i would like to elaborate on five strategic priorities in our effort to further strengthen our national aml / cft / cpf regime : first of these is the new national coordination committee to counter money laundering roadmap that is currently being developed as we refresh our national risk assessment. this new roadmap, like the existing one, will outline key initiatives in the areas of investigation, enforcement, coordination, and capacity building. improvements and refinements will