This is true both at a domestic and an international level. A first step is for the relevant national authorities to have clear, well established, processes for decision making and for communicating externally, and to ensure that these processes are well understood by all parties. In the UK, HMT, the Bank and the FSA have a published Memorandum of Understanding (MOU), established in 1997, which sets out a high-level framework for co-operation in the field of financial stability. Although there is no such agreement at an international level at an equivalent level of detail, a ‘Memorandum of Understanding on co-operation between banking regulators, central banks, and finance ministries of the European Union in Financial Crisis Situations’ was signed earlier this year. It is fair to say, however, that this represents only a first step. Finally, if the authorities decide to take measures to mitigate the systemic impact of a crisis—for example through emergency liquidity injection of one sort or another—it is vital that the central bank, supervisor and ministry of finance act, and are seen to act, in a decisive and joined up way. In the UK, the MOU provides for strategic management of a crisis at meetings of a ‘Standing Committee’, the members of which are senior representatives of HMT (who chair the meetings), the Bank, and the FSA. BIS Review 79/2005  5  liquidity became fragile, then, all else being equal, firms would be more vulnerable to liquidity problems.
Zeti Akhtar Aziz: Three trends and their post-crisis implications Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Inaugural Official Monetary and Financial Institutions Forum (OMFIF) Global Lecture, Frankfurt, 1 March 2010. *  *  *  It is my great pleasure to be here in Frankfurt to participate in this inaugural OMFIF meeting, and to speak at this evening’s inaugural lecture at the Goethe University. These are significant times for policymakers and the financial industry. As we come out of the worst international financial crisis in decades, there still remain some unresolved issues that need to be addressed. The recovery has prompted focus on exit strategies and on the search for more permanent solutions that will put the financial system on a more solid foundation. These issues are however being considered during a period of exceptional conditions. Of concern, is that this might significantly influence the direction of the reform agenda with its medium and long term implications which could be counter to solutions that would lead us to a path of stability and sustainable growth. My remarks this evening will focus on three trends that are gaining significance in the global economy and the international financial system and their implications as we progress forward in this post crisis era.