This is not driven by any ideological design but we have always been careful to ensure that policy prescriptions fit our economic, legal and operational circumstances. Some of the policy approaches that have been our practice are only recently being seriously considered by the global community. A good example is capital controls or now more elegantly known as capital flow management measures. Our approaches, while sometimes can be considered as ‘different’ are premised on several considerations. First, is that we considered financial stability risks in our monetary policy decisions. While moves to formalise this as part or within the broader context of monetary policy frameworks have been a more recent phenomenon in the aftermath of the recent crisis, Malaysia has always been vigilant against the risks of financial imbalances. We have looked into this aspect for as long as I can remember. In 1992, for instance, the Bank had already introduced administrative limits, or macro and microprudential measures as it is known now, to address the risks of financial imbalances arising from specific sectors of the economy. Back then, limits on hire purchase loans and guidelines on credit card operations were put in place as complementary measures to the tighter monetary policy stance of the Bank. Even since then, financial stability has remained an important mandate of the Bank. This mandate was reinforced with the introduction of the Central Bank Act in 2009, which established Bank Negara Malaysia as the financial stability authority for Malaysia.
The first is through transparency in our macro-economic policies - in the provision of reliable data, and through clarity in both our monetary and fiscal objectives, in our analysis and in our decision-making, so that you are not exposed to wholly unpredictable behaviour and can make your own considered judgements as to how far our policies are likely to succeed. Your judgements, of course, can in turn have an important bearing on our policy decisions. Secondly we can help in providing robust infrastructures - and I have in mind not just the financial infrastructure, though sound financial systems are clearly hugely important, but much more widely the legal framework, accounting and disclosure standards, and governance structures, for example, as they apply throughout the private sector, so that again you can base your assessment of corporate credits on a fuller understanding of the risks. We have been making very considerable efforts in different international fora in recent years to establish codes and standards of best practice in all these areas which can be universally applied, but I don't need to remind you how far we all still have to go. And thirdly, in relation to sovereign debt, I think that the international community could, and should, do more to clarify the scale of official support that a country running into difficulties might reasonably look for, and the kind of conditions that it might expect to apply.