As these new rules are designed and implemented, we are expected to adapt and change our business models and risk practices. Bank Negara Malaysia is adapting as well. I have highlighted earlier the development on the regulation and supervision’s front. Allow me to highlight key developments on the enforcement front. Given that combating financial crime continues to be one of our key priorities in sustaining financial sector integrity, Bank Negara Malaysia is intensifying enforcement actions on AML/CFT non-compliances and breaches of legislations. Since 2012, Bank Negara Malaysia had compounded several banks and money service business operators for various non-compliances with the Anti-Money Laundering and Anti-Terrorist Financing Act 2001 (AMLATFA). Besides AMLATFA, the new AML/CFT policies are also issued under The FSA and IFSA. FSA and IFSA provide Bank Negara Malaysia with wider enforcement powers including the administrative and civil sanctions for breaches under these Acts. FSA and IFSA also allow for enforcement actions taken under these legislations to be made public. This means that the reputational stake for non-compliance has been set higher. BIS central bankers’ speeches  3  This is necessary to strengthen financial sector’s compliance to AML/CFT Policies and preserve the integrity of the financial system from being abuse for criminal activities. Bank Negara Malaysia recognises that the vast majority of the DNFBPs seek to comply with the law and for certain profession such as the lawyers and the accountants, through their ethical obligations.
That policing can be achieved through penal interest rates. But we can see no monetary policy issue in relation to intra-day credit. The extension of sterling intra-day liquidity in our present domestic RTGS system is of no interest to, and never considered in the context of, monetary policy decisions. The same holds for all other countries. Indeed we could go further and say that denying even-handed access to TARGET through out central banks will negate one of the main purposes of the whole exercise, to reduce the risk inherent in systems in which banks are exposed to each other for a period of hours. Banks would find other ways round the restriction which would be more risky. So central banks across Europe will have scored an own goal. We shall need to look carefully at this issue as we move towards 1999. If restrictions were to be applied to out central banks which made TARGET unattractive to banks in London, thereby encouraging them to use less secure cross-border mechanisms for euro payments, then we shall need to think about the other options we could adopt. One possible option might be to develop our own euro RTGS arrangements to allow quick, efficient and safe euro payments within the UK which would not rely on access to intra-day credit from the euro area. We would prefer a pan-European solution which, we strongly believe, would be in the interests of the EU as a whole in the long run. But one thing is clear.