KUALA LUMPUR: There is a critical need for nations, institutions and businesses to strengthen resilience in today’s increasingly volatile environment, as the global economy continues to face waves of disruptive forces – from climate change and geopolitical conflicts to sweeping policy shifts in advanced economies.
Former Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz said apart from geopolitical shifts, rapid advances in technology, digitalisation and artificial intelligence are reshaping industries and demanding new approaches to risk and innovation.
“Ensuring monetary and financial stability is no longer optional – it is a strategic imperative. More than ever, local knowledge, innovation and expertise in financial and monetary economics must be sharpened and actively applied to navigate uncertainty and secure long-term, shared prosperity,“ she said at the launch of the Tun Ismail Ali Center of Excellence (TIACOE) today.
To support these goals, Zeti said, efforts are being made to advance research in monetary and financial economics while simultaneously enhancing the capabilities of local institutions of higher learning.
“There is also a strong emphasis on broadening engagement with academics, industry players, students, and the public to foster a deeper understanding of these critical areas.
“Central to this mission is TIACOE, which is envisioned to serve as a bridge, strengthening collaboration, encouraging knowledge sharing and deepening engagement between academia and the broader ecosystem,“ said Zeti, who is also the founding chair and co-chair of the Asia School of Business Board of Governors.
Named in honour of the late Tun Ismail Mohamed Ali – the first governor of Bank Negara Malaysia and a prominent figure in the nation’s financial history – TIACOE is endowed by BNM and housed within the Asia School of Business.
Even ahead of its official launch, the centre has made significant strides in laying a strong foundation.
Key initiatives include research seminars featuring distinguished international speakers, such as Professor Helene Rey of the London Business School, as well as the appointment of Professor Refet S. Gürkaynak of Bilkent University as a research fellow, who delivered a public lecture.
There were also research engagements with local universities, including Universiti Kebangsaan Malaysia and Universiti Malaysia Sarawak, as well as the introduction of a dedicated grant programme to support scholarly work.
BNM governor Datuk Seri Abdul Rasheed Ghaffour said emerging challenges such as geo-economic fragmentation, climate change and the rapid digitalisation of finance are reshaping the global economic landscape, with significant implications for monetary and financial systems worldwide.
Without adequate preparedness, he said, central banks risk being blindsided by evolving risks that could undermine established frameworks and institutional stability.
“As the late Tun Ismail Ali aptly noted, ‘the central bank works in an imperfect world, with instruments whose influence is only imperfectly understood, in seeking to attain objectives imperfectly focused and stated only in broad general terms’.
“His words remain a powerful reminder of the complexity and uncertainty that central banks must continuously navigate,“ Abdul Rasheed said.
In this context, Abdul Rasheed said, central banking remains an imperfectly defined profession, one where decision-making is often marked by uncertainty and complexity.
“To be effective, a central banker must possess the serenity to accept what cannot be changed, the courage to challenge what must not be accepted and, above all, the wisdom and experience to discern between the two.
“These qualities are more relevant than ever today, as navigating an increasingly complex economic landscape calls for sound judgement, resilience, and the ability to adapt with clarity and conviction.”
Abdul Rasheed said for central banks, prioritising the function over the form of financial innovation is crucial, particularly as ongoing developments continue to reshape the operating environment.
“A clear example lies in the rapid pace of innovation across the financial sector, such as the emergence of tokenised platforms and the growing role of non-bank financial intermediaries.
“By focusing on underlying functions, central banks can better assess and address key risks posed by digitalisation and innovation, especially those affecting monetary transmission and broader economic and financial stability,“ he said.
The launch of TIACOE reflects the Asia School of Business’s commitment to being a premier business school and a catalyst for knowledge and innovation, particularly in the field of monetary and financial economics in Malaysia.
