Re-reading Lord King’s article from today’s perspective, I am struck by the concerns he identified in his conclusion. He expressed a fear that relegating money to a behind-the-scenes role in the formulation and analysis of monetary policy entailed three dangers: (1) by obscuring the classical dichotomy, people would be misled into thinking that there is a permanent trade-off between inflation, on the one hand, and output and employment, on the other; (2) by discussing monetary policy in terms of real rather than monetary variables, the impression would be given that monetary policy can be used to fine tune short-run movements in output and employment, in denial of the ‘long and variable’ lags in monetary policy transmission; and (3) by dropping money, those parts of the monetary transmission mechanism that operate through the impact of monetary quantities on risk and term premia – which would necessarily come to the fore as policy rates reached their effective lower bound – would be neglected. With all the caveats of the preceding discussion, circumstances have dictated that the lattermost danger has been managed. Following the financial crisis, central banks have reduced policy rates to their effective lower bound, and become dependent on monetary transmission via precisely the risk and term premia channels that might otherwise have been neglected.
The Kijang Emas Scholarship is distinct from the Kijang Scholarship in that the recipients are given the freedom to pursue any field of study at top universities in any country of their choice. The Bank also does not impose any bond on the recipients except that they return, contribute and partake in the development of our nation. To date, 44 high potential talent have been awarded the Kijang Emas Scholarship. The recipients have graduated or are currently pursuing their studies in diverse fields of study including Medicine, Engineering, Law, Economics, Dietetics, Actuarial Science, Accounting, Dentistry, Biochemistry, Genetics, Architecture, Psychology and Geophysics in top universities around the world such as MIT, University of Pennsylvania and the University of Cambridge. Thus far, 11 Kijang Emas scholars have completed their undergraduate studies and have returned to serve the nation, while another seven scholars are expected to complete their studies in the next six months. For the 2015 Kijang Emas Scholarship, we received a total of 212 applications from top SPM students scoring straight A+ for their 2014 SPM. From this, the Bank shortlisted the top 24 students based on their SPM results and also on their level of involvement in co-curricular and sports activities. The students then underwent a rigorous evaluation process under the Bank’s “Kijang Academy” which assessed their technical and leadership competencies, as well as their values. We are pleased to award four outstanding students the Kijang Emas Scholarship this year. Having just completed their SPM, they will be enrolled into the respective pre-university programmes.