Law enforcement agencies have also stepped up capacity and efforts to curb laundering of illegal proceeds. Three main law enforcement agencies for the AMLATFA investigations, i.e., the Royal Malaysian Police, the Malaysian Anti-Corruption Commission and the Royal Customs Malaysia have established dedicated AML/CFT units to give focus to ML/TF investigations and expedite overall enforcement actions. Other related enforcement agencies have also geared up to achieve the same progress. For Bank Negara Malaysia, we will remain vigilant on the level of compliance of the financial institutions with the AML/CFT rules and measures. Thematic examination will continue to be carried out on AML/CFT compliance of the financial institutions, and other reporting institutions, when the need arises. Non-compliance incidences will be dealt with based on the seriousness of the issue. We will not compromise on serious matters, such as tipping-off, as those are the foundation of the AML/CFT framework. Apart from that, we are fully aware of the concern of not to cause the “overshooting” of AML/CFT implementation so as to affect the financial inclusion agenda. For this, Malaysia will be involved, under the umbrella of the APG and jointly with the FATF on initiative related to financial inclusion, in particular to look at best practices to ensure that implementation of the AML/CFT measures is not a barrier to financial inclusion. In Malaysia, the subject of financial inclusion is actually embedded in the National agenda and implemented with the full participation of the financial sector.
Monetary policy normally operates by lowering key rates to reduce the real interest rate when expected inflation and market risk premiums are stable in the short term. When the key rate moves close to its lower bound, the real interest rate can still be influenced through key rate expectations, influencing risk premiums and anchoring inflation expectations. The expectations channel will be particularly important if the current key rate cannot be further reduced. For Norges Bank, the expectations channel is an established part of monetary policy in that we provide forecasts for the key policy rate. To sum up, it is useful to decompose the factors behind the change in the interest rate path since 17 December 2008. The interest rate forecast in the Monetary Policy Report is lower than the forecast published in December last year. The outlook for global growth has deteriorated further. The slowdown in the Norwegian economy appears to be more pronounced than expected in December. Lower global and domestic demand would suggest a lower key policy rate than projected in December. Our inflation forecast, along with the stronger krone and lower key rate expectations abroad also suggests a lower key policy rate than projected at that time. 14  BIS Review 37/2009  Let me conclude. Monetary policy cannot fine-tune developments in the economy, but it can mitigate the largest effects when the economy is exposed to shocks. Overall, the outlook and the balance of risks suggest that the key rate should be gradually reduced further.