The new legislation has also improved the ability of the Bank to respond to financial stability risks that can originate from shadow banking activities, including to issue orders requiring such intermediaries to address any risk identified which could threaten financial stability. A Financial Stability Executive Committee chaired by the Governor, which includes the Treasury Secretary, heads of key regulatory authorities and independent parties as its members may impose macro-prudential measures on these non-bank financial institutions to prevent the build-up of financial imbalances from this sector. With these necessary preconditions firmly in place, Malaysia embarked on a gradual and sequenced approach towards liberalisation and internationalisation. In 2005, Malaysia migrated to a flexible exchange rate regime at the very same moment that China did. It has provided Malaysia with greater flexibility to adjust to changing structural conditions in the region and the global economy. This has been reinforced by the progressive liberalisation of foreign exchange administration rules which have enhanced business competitiveness and facilitated larger volumes of trade and foreign direct investment flows. This has generated greater two way flows in the foreign exchange market and thus promoted orderly conditions in an environment of highly volatile capital flows. In the financial sector new licences and foreign equity interests in the banking and insurance sectors have now moved beyond the prescription of hard limits, to assessments based on the prudential and in the best interest of Malaysia criteria. In building a stable and resilient financial system, the Central Bank has accorded greater emphasis on financial inclusion.
In any case, I would like to stress that, from my perspective as a supervisor, Pillar 1 should remain risk-based and that we should move beyond the somewhat artificial opposition between green and brown exposures, by assessing transition risk more on the basis of transition plans. As regards the digitalisation of finance, in addition to contributing to the development of regulations such as DORA (Digital Operational Resilience Act) and MiCA (Markets in cryptoassets), which aim to facilitate the development of innovations in a framework that improves confidence and financial stability, we can, as a central bank, play a positive role from an operational point of view by reviewing our offer of monetary services. In this perspective, the Banque de France has successfully conducted nine experiments with central bank digital money (CBDM) for the purpose of interbank settlement, securities transactions and cross-border payments over the past two years. They will continue in 2022 in two major areas: -  The first area concerns the settlement in central bank money of securities issued on new distributed ledger platforms, which will be governed by the pilot scheme from 2023. New technologies offer opportunities to facilitate the trading of financial securities and improve the functioning of markets. However, central banks are careful to ensure that they do not lead to market and liquidity fragmentation. Following the example of what has been done for TARGET2-Securities, the Eurosystem could therefore adjust the means of access to its settlement asset to secure trading of tokenised assets.