Monetary authorities have been intervening in the exchange rate market from time to time ‘to calm the situation’. This is well noted in research work going as far back as 19751, that it is unrealistic to envisage a perfectly free floating regime. BNM’s motivation in intervention operations is to smooth out the erratic swings in exchange rate that cause disorderly market conditions. Our principles remain that the market will continue to determine the exchange rate levels. Indeed, given our sizeable FX market, any intervention to 5/7  BIS central bankers' speeches  determine a certain level is an exercise in futility, and would lead to costly distortions. In the final analysis, market forces should dictate exchange rate levels. But as a central bank, it is our duty to ensure that these forces are better balanced, and that the price mechanism is not distortionary or disorderly. Part IV – Initiatives to Build Resiliency and Liquidity It is also the central bank’s duty to continuously be at the forefront in developing the financial market. In September 2017, to facilitate greater access by non-residents to the onshore financial market and subject to registration, BNM had introduced flexibilities for non-residents to manage ringgit exposures arising from ringgit-denominated crude palm oil (CPO) contracts traded on Bursa Malaysia. To date, the flexibility has managed to attract a number of non-residents including major CPO players with projected hedging volume of RM20 billion per year. This will deepen the onshore financial market.
Yves Mersch: Medium to long-term priorities of Capital Markets Union (CMU) for the ECB/Eurosystem Panel remarks by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Eurofi conference, Luxembourg, 10 September 2015. *  *  *  While the Green Paper has set the right overall objectives of CMU and identified priorities for early action and the measures for the medium- to long-term, CMU needs to be pursued through a higher level of ambition to achieve greater capital markets development and deeper financial integration. 1. To bring about its expected benefits, the CMU should foster and result in a high level of financial integration in capital markets across the EU based on an adequate legal and regulatory framework. This would imply more steps towards greater harmonization of 1.  bankruptcy law,  2.  company law and  3.  taxation of financial products  that pose great political challenges. The aim is to ensure that investors have the same costs and equal access to finance irrespective of where they are located in the EU. Ultimately, the supervisory architecture will also warrant revision. The final destination in the path towards CMU will need to include the development of a single rulebook. These elements are key if we are to attain what has been ambitiously coined as CMU. 2. A schedule with clear milestones and deadlines in the upcoming action plan would facilitate implementation. 3. Market-led initiatives to promote capital markets are important but insufficient.