This article first appeared in The Edge Malaysia Weekly, on March 21 - 27, 2016.

SEASONED banker and CIMB Group Holdings Bhd chairman Datuk Seri Nazir Razak served as the banking group’s CEO from 1999 to 2014 — almost parallel to Tan Sri Dr Zeti Akhtar Aziz’s 16-year tenure as Bank Negara Malaysia governor. The Edge asked him to share some of his thoughts as Zeti prepares to retire from the central bank.

The Edge: What is your overall view of Tan Sri Zeti’s governorship? Has she done a good job?

Datuk Seri Nazir Razak: I am a fan, as are most of my fellow businessmen and professionals at home, I think. Overall, she has done an extremely difficult job very well. I know the international finance community — policymakers, bankers and investors — see her as one of the world’s best central bankers.

What do you think have been her biggest contributions? What, in your view, will be her greatest legacy?

There are so many. If we talk about the basic measures, throughout her tenure, the Malaysia financial system has been stable and has grown and developed very well. We have weathered a global financial crisis and we are standing up pretty well in the current emerging market crisis. 

The first financial sector masterplan was a masterpiece and much of it was written by her personally. For banks, it was a navigational constellation to guide us as we emerged from the depths of the Asian financial crisis and strengthened governance, capital buffers, risk management and so on.

Throughout her tenure, monetary policy has always be measured. In fact, Bank Negara was usually ahead of the curve and several times when I doubted its decision, I was happy to admit that I was wrong on hindsight. In recent times, allowing the ringgit to weaken has also been absolutely the right response.

She, of course, provided global leadership for the development of Islamic finance. No one comes close to her in this.

I also watched her develop Bank Negara as an institution. She was a CEO who led by example with excellent work ethic. She internally reorganised and reformed Bank Negara. If we look at just the regulation side, its approach today is cutting edge. Our supervisors are well trained and focus much more on substance, whereas in earlier times, we got frustrated with their obsession with form.

She has also been outstanding on the global stage, at the table with the best minds in global finance. A fantastic ambassador for Malaysia and of Malaysian talent. In how many fields can Malaysia boast of having one of the world’s best?

What do you reckon are her failings? Where has she fallen short?

No one is perfect. I think Asean banking integration fell well short of expectations and despite her best efforts, she could not move the other central banks along. In terms of banking consolidation, I always had a slightly different view in that she preferred to leave it to the market forces, whereas I thought Bank Negara could have been more interventionist in the early 2000s to reduce the number of banks and other financial institutions.

Was hers a period of over-regulation of the financial industry? If so, was this a good/bad thing?

No, I don’t think so at all. Banks have to be heavily regulated and judging by what my contemporaries elsewhere tell me, I think Bank Negara has been sensible.

What do you think are the requirements/qualities the new governor must have, especially given that the appointment comes amid one of the country’s most challenging periods? And, is there anything that he/she should do differently from Zeti?

Her successor will have huge shoes to fill. Firstly, in the current climate, he/she has to quickly demonstrate that it’s business as usual at Bank Negara because markets are hyper-sensitive about Malaysia. The integrity and independence of Bank Negara have to be preserved and be seen to be preserved.

Secondly, he/she has to approach the job based on his/her own strengths and weaknesses — doing it her way when you are not her would be a mistake.

Frankly, I would prefer for her to remain as governor until things are more stable.

Are there any anecdotes you might want to share of your personal experiences with Zeti?

I did not have a lot of close interaction with her because she kept her distance from bankers and businessmen, as was proper. But I will always remember two incidents.

During one of my early days as a bank CEO, I received a rare call from the governor herself and halfway through the call, I found myself standing at attention, alone at my desk! Najib heard this story and quipped, “The problem with you is that you are only scared of one person — Zeti!”

Then, there was the day I accidentally accurately predicted an interest rate announcement that Bank Negara was going to make. She called me and threatened to have me charged under the Official Secrets Act if I had accessed privy information. She can be very scary when she is angry. Thankfully, I managed to convince her that it was a lucky (or unlucky) guess.

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