Despite its substantial international integration, the Swiss economy, at this point, is scarcely affected by the turmoil in the international financial markets. Growth remained strong in the third quarter. Real gross domestic product rose at an annual rate of 3.3%. Employment continued improving across the board, in line with our expectations. In both the industrial and service sectors, the process of new job creation carried on. In construction, employment stabilised at a high level. Unemployment continued falling. As a result of the favourable developments in the labour market, consumer sentiment remains buoyant. Consequently, household expenditure is still increasing at a robust pace. Furthermore, strong demand for labour is now leading to a faster increase in real wages. Given this situation, private consumption should continue to support growth in 2008. Due to impetus from Europe, Asia and the oil-producing countries, goods exports are advancing further. Looking at production, expectations remain optimistic both for the manufacturing sector and for non-financial services – businesses expect the growth phase to persist. Investment activity remains lively. The banking sector is faced with the uncertainties that have arisen out of the developments in the US real estate market together with the structured products that relate to this market. It is possible that the contribution of the Swiss financial sector to GDP growth will fall as early as the fourth quarter of this year, due to a drop in the volume of activity on financial markets.
Over the years, we have put in place various arrangements to enable smooth information flows between the financial sector and the law enforcement community, within a controlled environment. These “public-private partnerships” (PPP) are vital as they allow the financial intelligence unit, law enforcement agencies and reporting institutions to leverage on intelligence-led collaboration and information sharing to detect financial crime and terrorism financing. This will further support investigation and prosecution processes. For Malaysia, our goal is to formalise and further deepen what we have built over the years. As such, I am pleased to announce that the PPP will be officially launched shortly by our Prime Minister. I wish to also express my appreciation to other participating agencies in the PPP namely Polis Diraja Malaysia, the Suruhanjaya Pencegahan Rasuah Malaysia, Jabatan Kastam Diraja Malaysia and the Securities Commission Malaysia, and also the 18 reporting institutions. Second, reporting institutions must accelerate efforts to further expand and develop their AML/CFT toolkit to deal with new and emerging risks. At our end, Bank Negara is in the process of reviewing our AML/CFT policies. A key outcome of this review is the move of our regulatory framework towards being more “risk-based” and “principles-based”. We have come a long way since the AMLA was gazetted in 2001. Since then, reporting institutions have matured in understanding and have fully implemented the regulatory requirements. This is also supplemented by the issuance of various guidance, technical notes and updates on regulation.