Zamani Abdul Ghani: Riding out of the global financial crisis – banking reforms and revival Closing remarks by Mr Zamani Abdul Ghani, Deputy Governor of the Central Bank of Malaysia, at the 13th Malaysian Banking Summit 2009 "Riding Out of the Global Financial Crisis – Banking Reforms & Revival", Kuala Lumpur, 12 May 2009. *  *  *  On behalf of Bank Negara Malaysia , I would like to thank ASLI for the opportunity to make the closing address for the 13 th Malaysian Banking Summit. Indeed the theme chosen is highly appropriate and timely as we are currently facing a period that is most challenging. The current global economic slowdown, as many are aware, has been compared to the Great Depression of the late 1920s. It began with the stock market crash in October 1929, otherwise known as “Black Tuesday”. As to whether the current global slowdown reach such proportions, it remains anyone's guess. But as events unfold and with lessons of hindsight gaining clarity, we have seen how institutions failed to fully understand or underestimated the complexity of products, and were unable to adequately measure tail risks as well, the procyclical impact of fair value accounting. While these may have merits in sharing the blame, others like the high levels of risk concentration and gearing together with the failure to manage maturity mismatches, are also equally apparent, if not fundamental, in contributing to the financial crisis. Comforting, however, is that none of our Malaysian institutions undertook complex derivative transactions.
This reflects the growing relevance of Islamic banking and is testimony to its acceptance as the embodiment of ethical banking and finance. Other threats to the financial system Financial institutions also face increasing challenges from other non-financial risks associated with the extensive use of technology and the potential outbreak of epidemics. Therefore it is vital then that the state of preparedness of BCP/BCM contingency measures is constantly ready to address any possibilities and not be blind sided by financial risks alone. Closing It is neither by accident nor coincidence that the Malaysian financial system is currently at a position of considerable strength, depth and resilience. Rather it is through the combined efforts of both industry players and the regulator as well as the support of all our  2  BIS Review 58/2009  stakeholders. I believe that this spirit of cooperation and mutual respect is entrenched and will serve us once again as we look forward to safely ride out the impact of the current global financial crisis. BIS Review 58/2009  3