Zeti Akhtar Aziz: Expanding ASEAN-EU economic links - the role of the euro Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Euro Conference “Expanding ASEAN-EU Economic Links - The Role of the Euro", Kuala Lumpur, 14 July 2005. *  *  *  Your Excellency Ambassador Thierry Rommel, Head of the EU Commission Delegation in Malaysia, Your Excellencies, Distinguished Guests, Ladies and Gentlemen, Good morning. It is my great pleasure to welcome you to the "Euro Conference: Expanding ASEANEU Economic Links -- The Role of the Euro". Bank Negara Malaysia is indeed honoured to co-host this event and would like to especially thank the European Commission for the opportunity. The purpose of this Conference is to bring together recognised experts to discuss the important issues affecting economic, monetary and financial interests in ASEAN and the EU. I believe that the exchange of ideas and views over the next two days would contribute towards an increased understanding of the developments and issues important to our respective regions. Our agenda is for the further strengthening of the close ASEAN-EU partnership that offers mutually reinforcing benefits to both regions. It is our hope that this Conference would serve as a catalyst to promote greater appreciation of the potential for an expanded ASEAN-EU economic relationship - a relationship in which trade and investment flows between our regions can be enhanced. The ASEAN-EU partnership has developed steadily over time through a number of well-established forums.
For example, regulatory requirements on banks could be raised to lean against a credit boom and lowered in the teeth of a credit downturn. In the public houses for credit, intake would be monitored, opening hours restricted and the Happy Hour abolished. This approach has become known in policy circles as macro-prudential policy. 17 Although the name is new, it is in the time-honoured policy tradition of “removing the punchbowl” from the party as it is getting started – a fitting analogy if the aim is to prevent a debt hangover. Had such a party-pooper been in place over the past decade, today’s debt headache would plausibly have been less acute. 14  Krugman (op.cit). 15  For example, Zingales, L (2008), “Plan B”, Economists’ Voice. 16  See, for example, http://scotland.shelter.org.uk/getadvice/advice_topics/paying_for_a_home/mortgage _arrears/mortgage_to_shared_equity. Bank of England (2009), “The Role of Macro-Prudential Policy”, available at www.bankofengland.co.uk. 17  BIS Review 10/2010  7  Regulation might also be used to lean against the collective tendency of banks to payout high even when profits are low. Among regulators internationally, there are proposals to introduce capital conservation rules, requiring banks to distribute less of their profits in adverse states of the world. By ensuring prudent profit retention on a collective basis, these rules ought to be in the long-term interests of banks and their shareholders, as well as the authorities.