On this note, and continuing the good work of the FMC, I would like to announce the third series of initiatives which will be effective immediately. The first initiative will be to extend the short-selling framework to Malaysian Government Investment Issue (MGII) by both conventional and Islamic banks. This will increase liquidity and boost trading activities for MGII in the secondary market as well as tighten the pricing gaps and yield differences between Malaysian Government Securities (MGS) and MGII. Islamic banks may execute the short-selling transactions based on bilateral binding promise (“muwa`adah mulzimah”) concept; The second initiative is to expand the eligible collateral for liquidity operations with BNM to include Bankers Acceptances (BAs) and Negotiable Instruments of Deposits (NIDs) issued by AAA-rated onshore licensed banks. Banks will now be able to obtain liquidity under BNM’s Standing Facilities by pledging these money market instruments. The expansion of eligible collateral is expected to provide an impetus to the trading activities of NIDs and BAs and improve pricing. This is in line with BNM’s expectations for interbank players to take on a greater role in intermediating and pricing of liquidity. The third initiative is the introduction of Bank Negara Interbank Bills (BNIBs) in ringgit and foreign currency. This interbank instrument will be available to onshore banks to better manage their ringgit and foreign currency liquidity and interest rate exposures and hence the capacity to provide competitive pricing on FX for all tenors.
In Chart 7, the greater the number of years spent in school, the darker the green in which the country is colored. In Asia, there are a number of dark green areas, such as Japan, Korea, Malaysia and Sri Lanka. As you would expect, Hong Kong and Singapore also belong to this group, although it is not shown clearly on this map. One may get the impression that Asia as a whole is not as green as North America or Europe, and is more or less similar to South America. This would seem to indicate that there remains significant potential for further accumulation of human capital in the region. At the same time, there are some interesting figures relating to U.S. universities, which are generally acknowledged as providing the highest standard of education, attracting talented people from all over the world. If you look at the data for U.S. university students by their country of origin, you can see that students from Asian countries dominate, as shown in Chart 8. Those students returning to their home countries will no doubt have a profound impact on the human capital there. It is well known that Bangalore, the IT hub of India, benefited from returnees from Silicon Valley. Moretti’s study shows that innovative, highly skilled workers contribute not only directly to the higher quality of human capital, but they also have a positive effect on the skills of those around them – a sort of positive externality.