I believe that supervision should be seen as only one of the factors influencing the health of the financial system. In this regard I am pleased to note that the Basel Core Principles recognise this by identifying the preconditions for effective banking supervision, including sound and sustainable macro-economic policies, a well developed public infrastructure, and effective market disciplines. I am sure that we can all agree that all of these factors are vital to the development of a sound financial system. In conclusion, as financial markets become increasingly globalised, supervisory co-operation and harmonisation become increasingly important. But I believe it is important that we don't assume that international standards are the holy grail and that their adoption will necessarily lead to a sounder financial system.
Supervision is only one of a number of factors impacting on the performance of the financial sector.
It is important that we have good supervision, but we should not over-emphasise its importance. I hope that you will find this conference stimulating and that you will enjoy your time in New Zealand.