Encik Abdul Rasheed Ghaffour: Optimal balance of paper and digital, cash and cashless; and next page for physical currency Welcoming address by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Currency Conference 2017, Kuala Lumpur, 15 May 2017. * * * Mr Richard Haycock, Chairman, Currency Research, Fellow central bankers, Distinguished participants. A very good morning and a warm Selamat Datang to Malaysia. Paper lives on A lot has changed in the past 10 years. In May 2007, there was no such thing as a smartphone. Tablets did not exist, and the human race had not discovered the fast-expanding universe of mobile apps. Back then, we read the news by leafing through the pages of a large newspaper. We listened to music with CDs, and bought or rented DVDs to watch movies. Today, most of these are streamed through internet devices. When e-book sales increased by over 1,000% in the two years leading up to 2010, many questioned the future of the printed book. The bankruptcy of Borders in the United States the following year solidified these fears. Similarly, there has been much hype about the end of cash. This has been sparked by the rising use of e-payments and the recent proliferation of digital currencies in an increasingly virtual world. However, just as physical books continue to enjoy increasing sales, we have seen cash in circulation rise in many countries, quicker than their GDP growth for some.
While most economies were able to recover in just over a year, in the decade that followed, wide ranging financial reforms were implemented. In addition, the development of the financial markets and the financial infrastructure were aggressively pursued to strengthen the capacity of the financial system. The legal framework and the regulatory and supervisory framework of the financial sector were also strengthened. Several important lessons from the crisis were also addressed, in particular, avoiding the excessive accumulation of debt whether by the household, corporate, financial sector or the public sector. Measures were taken to avoid the build-up of such  BIS Review 94/2010  1  leverage and excesses largely through prudential regulation. In addition, buffers were built during the good times. These reforms have yielded tremendous payoffs for Asia. With more developed financial markets and with better capitalised banking institutions equipped with strengthened risk management and governance practices, Asia did not experience any disruptions in financial intermediation during the 2008–2009 global financial crisis. The continued access to financing has in fact been important in sustaining domestic demand and in supporting Asia’s rebound from the recent global crisis. The International Monetary Fund estimates that the emerging economies in Asia will grow by an average annual rate of 8.6% in the next five years. Asia is therefore very much part of the global shift that is taking place in which the economic power in the world will become increasingly more dispersed with the emergence of several growth centres in the global economy.