A further segment that will gain in importance is that of the small and medium-sized enterprises (SMEs) given its growing significance in the economy. The main concern with respect to banking for the SMEs is access to credit. Among the issues that have been raised is the quality of service delivered in terms of accessibility, the lack of responsiveness, lack of understanding of their business, poor branch level service, and poor turn around time. Other complaints have centered on the high collateral demands and the general perception of a lack of willingness to extend financing by the banking institutions. While the recent year showed an encouraging trend with loans to SMEs increasing by 3.1%, the issue of the overall services provided to SMEs need to be enhanced. Bank Negara Malaysia has undertaken a survey through the banking institutions on the SME profile and requirements. This will represent an important database for the development of a comprehensive framework for the development of SMEs initiated by Bank Negara. The survey findings will also be useful for the banking industry in formulating its own strategic plans with respect to this segment. With the advances in technology, banking institutions should be in a position to enhance access and quality of service for the SMEs. Ladies and Gentlemen, The performance of the banking institutions is also being gauged from the perspective of the shareholders. There are several significant issues affecting shareholders in the current environment.
Having said that, I would like to add that central banks have managed quite well to quickly adapt to the unprecedented circumstances in markets. Still, deeper thought has to be dedicated to these issues when time eventually allows. As a final remark on preparedness I would like to stress the importance of practice. No matter how sophisticated crisis management arrangements are, they have to be deployed properly by the authorities using them. However, since financial crises thankfully are pretty rare events, people working in these authorities probably are not going to be particularly used to doing that. But with appropriate practice, crisis management skills can be substantially improved. In my own organisation we regularly perform crisis exercises, both on our own and in cooperation with other relevant authorities and countries. These exercises have not only helped to improve the staffs’ skills significantly, they have also provided important lessons on how different crisis management practices could be improved. One such lesson has been that a higher degree of international coordination and harmonisation is needed, a lesson that has certainly been confirmed by the current crisis. International co-operation and harmonisation is needed The need for greater cross-border cooperation pretty much applies to all of the issues I have touched upon so far, both regarding the prevention and the management of financial crises. Taking Europe as an example, it has become quite obvious in the last year that the diverging national structures of frameworks for regulation, supervision and crisis management have complicated the management of the current crisis.