Zeti leaves on a high note
The former central bank governor will be remembered for the policies she put in place during her 16-year tenure.
GENERALLY, central bank governors hog the limelight for their monetary policies that affect the financial system of the country. The soft-spoken Tan Sri Dr Zeti Akhtar Aziz was no different until she started to get vocal about the travails of 1Malaysia Development Bhd (1MDB).
After her open statements last year voicing concerns about the risk that 1MDB’s ballooning debt posed to the financial system, Zeti was more in the news about Bank Negara’s actions against 1MDB than her views on the economy.
However, putting 1MDB aside, Zeti will go down in history as Malaysia’s central banker responsible for restoring strength and sturdiness in the financial system. She will also be known as the central banker who saw through Malaysia’s major banking consolidation that reduced 55 financial institutions to eight.
An economist by training, Zeti could read the trends of the global economy well ahead of the curve and tailored the Malaysian monetary policies accordingly. For instance when developed countries adopted an ultra low interest rate policy since 2010, Zeti reduced Malaysia’s interest rate but kept it at 3%.
However other countries in the region dropped interest rates to follow the global trends. Bank Negara’s decision proved to be right because after 2012, the US dollars started flowing out of emerging markets. Some countries in the region had to adjust their interest rates up again to reduce the outflow, causing disruptions to the business environment.
Zeti took the helm on May 1, 2000, when Malaysia was seen as an outcast in the global financial world due to its imposition of capi- POLITICAL events that dominated the nations’ headlines introduced some bold new words and terms into the Malaysian vocabulary.
Among these was the term Bangsa Johor.
Originating from the 1920s, the term was resurrected by the Sultan of Johor Sultan Ibrahim Ibni Almarhum Sultan Iskandar to promote affinity to the state.
Bangsa Johor became popular because of its use to foster racial unity in the state.
The hitherto unheard of term kesipuan also became commonly used by the public when an invitation to former prime minister Tun Dr Mahathir Mohamad to attend the grand palace ceremony for the installation of the 15th Yang di-Pertuan Agong was withdrawn.
In the withdrawal of the invitation, the word was used to mean “an embarrassment”.
The story of a runaway ostrich sprinting down the Federal Highway also became a sensation tal controls. During that time, capital control was a taboo word in the world of high finance because it restricted the movement of currencies.
However over the years, she used capital controls to strengthen the domestic financial system and the governance of banks. She made sure banks had strong shareholders and that only those who are “fit and proper” lead the management.
During the 1998 economic crisis, Malaysia had a fragmented financial system comprising 20 commercial banks, 23 finance companies and 12 merchant banks. The government decided that the banks had to consolidate to become stronger and the process started from January 2000.
Less than five months later, Zeti landed the top spot in Bank Negara to oversee the consolidation process. It was no easy task for any central banker because banks had strong and powerful shareholders resisting the consolidation.
In some ways, Zeti had her own deft ways of dealing with banks and shareholders of banks that did not comply with the strict requirements of the central bank.
Even the most powerful of politicians could not move her or decisions that Bank Negara had made. A retired Bank Negara official said that after her first five years at the helm, Zeti mastered the art of handling political pressures.
“Ensuring the domestic financial system was stable was her priority always,” said the official.
“Zeti would point out the pain that the banking system went through during the 1998 Asian financial crisis should not go to waste. Hence ensuring the stability of the domestic financial should always be the priority and cannot be compromised.”
The strength of the banking system was tested during the 2008 US financial crisis that caused the with the public. The ostrich, called Chickaboo, gained celebrity status after the video of her run went viral. Several brands such as Digi, Huawei, Pos Malaysia, Volvo, Dominos Pizza, Optical 88, Babas Curry Powder and Chevrolet jumped on the ostrich bandwagon and came up with Chickabooinspired advertisements.
Other words that have gained widespread use include swafoto for selfie and tular which refers to news that has gone viral.
Malay expressions such as suri teladan which means role-model, banking system in the world’s biggest economy to breakdown. Banks were not lending to each other in the US and the Federal Reserve had to step in.
During that period the world financial system was in a state of disarray but Malaysia sailed through the financial crisis well.
Another storm took place in 2014 when oil prices collapsed – declin- jerayawara which refers to a road show, latar pentas for the backdrop of a stage and gegantung which is a bunting, are now common words.
Furthermore, imej tumpu which means highlights and pascanilai which means post-mortem have also become popular this year.
Foreign words such as “posttruth” and “Brexit” have also become popular in Malaysia.
The Oxford English Dictionary has named “post-truth” as the word of the year for 2016.
The word denotes “circumstances in which objective facts are less ing by 50% in a space of six months. However the local banking system has been able to withstand the shock although all banks are exposed to the oil and gas industry.
“The credit goes to banks and the central bank that keep a close watch on their lending activities and exposure to the sector. The strict lending policies were put in influential in shaping public opinion than appeals to emotion and personal belief ”.
The adjective was widely used by people describing post-factual political debates that appealed largely to emotions rather than facts.
One of the favourite phrases of Malaysians and also on Google is “Brexit”, an abbreviation for “British exit”.
The term became famous when British citizens voted in a referendum to exit the European Union on June 23. place during Zeti’s tenure,” said a banker.
In the final weeks before her departure on April 30 this year speculation was rife that the new candidate for the top post in the central bank could be someone who was not from Bank Negara, an “outsider”. Several times, Zeti stressed that the central bank had a robust system of succession and there were candidates from within to replace her.
Finally, Datuk Muhammad Ibrahim, one of the two candidates from within Bank Negara was chosen to take over from Zeti. The appointment of Muhammad calmed financial markets because they saw a continuity in the policies set by Zeti, who has been recognised as among the most competent central bank governors.
During her 16 years as Bank Negara governor – which makes her the second longest serving governor after Tun Ismail Mohamed Ali – Zeti put in policies and practices that will long be remembered.
After her retirement, speculation was rife that she was invited to take up positions in several international economic organisations. On Oct 19, Zeti was appointed as a member of the Asian Infrastructure Investment Bank international advisory panel.
The increased use of “alt-right” for “alternative right” became a phenomenon among users for rejecting multiculturalism advocating for white supremacy. The term was coined by white nationalist Richard B. Spencer.
Thanks to Democratic nominee Hillary Clinton, the phrase “basket of deplorables” became popular over social media when it was famously used by her to refer to president-elect Donald Trump’s supporters who were racist, sexist, homophobic, xenophobic and Islamophobic.