In particular, the systemic risk concentration in a small number of global financial institutions is further increased and an increasing number of foreign jurisdictions are exposed to risks arising from the potential default of those banks. This aggravates the risk that these financial institutions may act as contagion channels for financial disturbances and may become or be perceived to be “too big to fail”. In addition, as several countries outside the European Union and the United States have observed, an unfair cross-border distribution of the costs for central clearing could arise. Finally, corporate governance arrangements of central counterparties may not be sufficiently reflective of the interests of all stakeholders, particularly as regards indirect clearing members. I am aware that several measures to control these risks are underway. Rules for central counterparties have been strengthened to ensure that they limit access restrictions to what is really necessary in order to manage the incurred risks and to ensure the central counterparties’ orderly default management processes. Similar governance rules now explicitly require central counterparties to adequately take into account the interests of clients and not only those of their direct members. Similarly, arrangements for the segregation and portability of client positions and collateral are being made. However, we will need to monitor very closely how these new requirements will work in practice, given the strong interest of global dealers in preserving their dominant position in the market.
Given these challenges and potential shocks to the economy, it is important that as a nation we build resilience and fortify the foundation of the economy. Towards this end, it is critical for us to be able to transform our economy. Less than 50 years ago, the Malaysian economy was primarily based on agriculture and commodities such as tin and rubber. Today, we are a well-diversified nation, with the services, manufacturing, and mining sectors as key growth engines. Most notable, Malaysia has established itself as a key hub for the electrical and electronics (E&E) manufacturing industry, playing an important role in the global supply chain. Looking to the future, we aspire to become an innovation-based and high valueadded economy by leveraging on technology and high skilled talent. Similarly, at individual level, Malaysians must build financial resilience by equipping themselves with the necessary knowledge and tools to manage their finances. This is where you, as practitioners, play a vital role by professionally advising, educating and guiding your clients to ensure they are on the right track to secure a better future for themselves and their loved ones. 1/4  BIS - Central bankers' speeches  A comprehensive and effective financial plan is crucial to help an individual or a family build financial resilience. Financial resilience is critical in a time of economic uncertainty and in a shock-prone world. It provides households with the ability to withstand the negative financial impact in periods of shocks.