Zeti: As governor, Jaffar had to take accountability

FOREX RCI | Former Bank Negara Malaysia (BNM) governor Zeti Akhtar Aziz believes that her predecessor, Jaffar Hussein, had to take accountability for anything that had taken place during his tenure as the central bank governor.

Testifying before the Royal Commission of Inquiry (RCI) tasked to investigate the foreign exchange losses incurred by the central bank in the late 1980s and early 1990s, Zeti noted that Jaffar had indeed done just that.

She was questioned by RCI member Tajuddin Atan, who pointed out that Jaffar, as BNM governor, had "ultimate authority" in managing the central bank and the management of its reserves.

Therefore, Tajuddin asked Zeti, what could have been the reason behind the former governor allowing forex trading to move to such a high level of losses.

Zeti replied: "I would say that the impression of the governor accords too much power to the governor.

"The governor has to take full accountability on anything that happens, just like in a commercial bank. If something happens, whether (one) knew it or not, one has to be accountable."

Apart from this, the role of both the board and management are also very important in banking and financial institutions, she added.

"The (Bank Negara) board says the management never escalated information up to the board and the board didn't know what the management and risk management were going through.

"I do not want to venture to make that assessment; as to what extent he (Jaffar) knew or whether he was part of it.

"But he took accountability for it in a very honourable way and he resigned," Zeti noted.

[More to follow]

-Mkini