in the field of economics and finance, outcomes are shaped by human behaviour – which, contrary to fundamental assumptions, is not always rational. in addition, economic systems are reflexive, in the sense that beliefs about what will happen often influence what does happen. going forward, as the global landscape and expectations of economic agents adjust to, as yet, an unknown new normal, the demands on the timeliness and quality of data and analysis will only increase further. in addition, an economic or financial crisis often would prompt a rethink of our approach to policy - making and of relevance, a re - evaluation of the statistics we use as the basis for our decisions. in this regard, the recent global financial crisis is no different. allow me to highlight two lessons from the recent financial crisis. first, the crisis highlighted that our understanding of the financial system was insufficient. financial innovation had resulted in a significant increase in financial intermediation taking place outside the regulated banking sector – what is today known as shadow banking. excessive risk - taking and leverage, by both regulated and shadow financial institutions, had significantly increased the vulnerabilities in the financial system. focus on the stability of bis central bankers ’ speeches individual institutions alone was not sufficient. instead, attention is required on the stability of the financial system as a whole. these underscore the importance of improving data coverage to keep pace with the constantly evolving economic and financial landscape. second, the unprecedented scale and scope of the crisis demonstrated that the interplay between exposures in the regulated financial system, the unregulated shadow banking system and the real economy can have interrelated implications. financial imbalances – in the form of excessive leverage and asset price bubbles – had built up amid stable inflation prior to the crisis. consequently, the long drawn out process of deleveraging and balance sheet repair by financial institutions, households and governments have suppressed aggregate demand amid less effective expansionary policies. in hindsight, more micro - data would have detected increasing systemic vulnerabilities in the residential property market, as well as increasing exposures among economic agents throughout the economy. to this end, more granular data would overcome the limitations of aggregated data in detecting vulnerabilities that are concentrated in selected segments of the economy and financial system. while these challenges in totality may appear to be rather daunting, i strongly believe they are surmountable, especially with greater collaboration amongst statisticians, compilers and end - users of data

malaysia. we are no stranger to international trade, ever since the rise of malacca as an important global port more than 600 years ago. despite accounting for only 0. 2 % of the world ’ s land mass, malaysia is currently the 25th largest trading nation in the world and a key player in the global value chain. our financial system is highly integrated with the international markets. malaysia ’ s economic and financial integration with the rest of the world has undoubtedly contributed significantly to our economic progress in the last few decades. and yet, there is increasingly growing pushback against globalisation, especially in the advanced economies. this is driven primarily by the view that open trade has worsened income and wealth 1 / 4 bis central bankers'speeches inequalities. the recent work by thomas picketty as well as branko milanovic ’ s “ elephant chart ” have shown how income inequality has worsened in the recent period. in 2016, the top 1 % earned more than double the share of global income compared to the bottom 50 %. it is no surprise then that accusations of free trade causing job losses and disproportionate depression of wages have shifted from economic textbooks to the forefront of policy discussions today. the next decade promises to be even more challenging, with rapid technological advancements poised to accelerate job displacements and potentially worsen income inequalities. malaysia faces this challenge. as we liberalised our economy over the years, there were industries and workers affected by rising competition. as our economy evolved, we moved away from uncompetitive sectors while new opportunities opened up. policies were implemented to facilitate these industries ’ transformation, while assisting the displaced workers. these include enhancing upskilling programmes, strengthening social safety nets and ensuring sustainable fiscal redistribution. there are legitimate concerns on trade liberalisation. in my view, the solution does not lie in retreating behind our own borders. instead, it lies in upholding the rules of fair trade and in us being proactive and adaptive in assisting those who have been adversely affected by globalisation. it is also clear that it is no longer sufficient just to focus on pursuing strong growth. we must also foster inclusive growth. financial globalisation beyond international trade, financial globalisation has also expanded tremendously. cumulative global bond and equity market flows are now more than 80 times larger than that in the year 2000 and far exceeded trade flows. there is no doubt that financial integration, if properly managed, can catalyse a more efficient allocation of productive capital and know