Central banks have a crucial role in crisis containment and management to provide liquidity and restore efficient functioning of financial markets to survive in financial crisis, says Bank Negara Malaysia governor Zeti Akhtar Aziz.

She said central banks also have an important role to lead resolution programmes and to build confidence in the financial system as the prospect of surviving financial crisis was not only about building resilience but also having the capacity to manage it.

"The world going forward is likely to continue to be affected by financial crisis.

zeti akhtar with bank negara report "History has shown that there have been more than a hundred distinct banking crises in this recent two decades," Zeti ( right ) said at the Svein Gjedrem Colloquium in Oslo on Thursday.

"Given that the central bank is the lender of the last resort, the central bank is in the front line of actions to restore stability," she said.

Regardless of the institutional arrangements for the supervision function, on whether it is based on an integrated model or a model that is organised along sectoral lines, Zeti said effective coordination was vital to effectively safeguard financial stability.

Established arrangement for coordination avoids a piecemeal approach by any individual agency in the system and ensures a comprehensive response to the crisis, she said.

"Greater coordination across agencies also allows for prompt actions to be taken," she said.

Zeti said central banks also need to undertake its own transformation and modernisation to remain effective in delivering mandates.

"Such institutional capability enhancement may involve changes in the institutional arrangements, organisational and governance structures and practices, the empowering legislation and the talent required," she added.

- Bernama