In addition, corporations or organisations in this new environment can no longer function by departments or sections, but as an integrated organisation. This also requires new governance arrangements. For an economy or a financial system, we have seen how a crisis in one segment was thought to be confined, but it had pervasive consequences on the entire financial system and the economy. Sixth, is that despite the increased connectivity of the world, as exemplified by the swift spread of the financial crisis and economic shocks throughout the global economy and international financial system in 2008, the institutional arrangements for the cross-border dimension of policy-making have yet to reach the levels commensurate with the degree of economic and financial integration in the world. Finally, the response to the crisis needs to be comprehensive. While addressing the weaknesses and lapses is important, equally important is the enabling environment for the measures to yield results. Pro-growth policies are vital for this purpose. During the Asian financial crisis, Malaysia gave equal attention to financial sector resolution to restore the financial intermediation process and thus credit supply. Equally emphasis was placed on addressing the problems of borrowers. Debt restructuring and mechanisms for support were put in place for the corporate sector, small and medium-scale enterprises and the household sector. This supported growth of the economy and at a fraction of the cost of the financial sector resolution.
Zeti Akhtar Aziz: Big shift – traversing the complexities of a new world Luncheon address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Khazanah Megatrends Forum 2012: “Big shift – traversing the complexities of a new world”, Kuala Lumpur, 2 October 2012. *  *  *  The global economy has now entered into a period of slower economic growth despite the significant and wide ranging pro-growth policies that have been implemented across the world. Why then has the world not been able to achieve a sustained long-lasting recovery? What has been holding back this prospect? In addition, the rapid and significant changes in the global environment have also brought with them new demands and new challenges. Our understanding of the factors that are containing the global growth prospects and the consequence of the new environment will better position us to face the fundamentally new landscape and to manage its consequent challenges. Let me first thank Khazanah for the invitation to speak at this Khazanah Megatrends Forum. The topic on the Big Shift that is being experienced in the world today is indeed highly relevant. While the international and national attention is currently focused on the immediate challenges of the global environment, equally important, however, is to recognise the long-term changes that will reshape our future. The first part of my remarks today will focus on the immediate challenges of the global economy, taking into account the fundamental factors that are likely to affect the growth outlook.