Central banks must build resilience amid structural shifts, says Malaysia's Governor
Abdul Rasheed Ghaffour, Governor of Bank Negara Malaysia, emphasized the evolving role of central banks from mere stewards of stability to architects of resilience. Speaking in Kuala Lumpur, he highlighted the need for agility amid structural shifts like geopolitical conflict and digital transformation.
From stability stewards to resilience architects
Governor Ghaffour argued that central banks can no longer see themselves merely as stewards of stability, but must also become 'architects of resilience'.
This shift is crucial for long-term adaptability in a structurally changing world, moving beyond familiar cyclical turbulence.
He identified four defining pressures: the reorganisation of the global economy with shifting trade routes and geopolitics, the rapid transformation by emerging technologies like AI and decentralised finance, shifting demographics altering consumption and savings, and increased public scrutiny demanding clearer communication.
These forces arrive simultaneously, amplifying uncertainty and challenging traditional policy frameworks.
Adapting through focus and collaboration
Central banks are adapting by transforming their focus, integrating price and financial stability with broader economic factors like climate and financial inclusion, and embedding climate considerations into supervision.
They are also strengthening resilience through collective action, fostering policy coherence domestically and internationally, including for cross-border payments.
Communication is evolving to earn public trust through accessible language and genuine engagement.
Finally, building institutional capacity via technology and human capital is crucial, as multidisciplinary issues demand diverse skills and judgment.
Resilience as a core mandate
This address is a critical re-evaluation of central banking's core purpose in a turbulent era.
It argues convincingly that resilience-building is not an add-on, but fundamental to long-term stability and public trust.
The call for integrated policy, proactive communication, and institutional adaptation sets a demanding but necessary path forward.