This challenge is not unique to Sri Lanka, but common to all countries which have opted to comply with Basel II requirements. To address this issue, banks in other countries have created a dedicated post in their institutions, i.e. Chief Risk Manager, who will not only look into the risks in the bank’s own portfolios, but also to the clients’ portfolios. The job of the Chief Risk Manager is to identify, evaluate risks and make recommendations to set out appropriate processes in managing the relevant risks. The processes should be acceptable to the senior management and the boards of the banks and also to the external auditors and the regulators. II. Appropriate risk evaluation techniques  Application of appropriate techniques for risk evaluation is an implementation issue. This is where the modeling comes into play. Modeling is used as a popular technique for identifying, quantifying and analyzing risks to enable the management of banking and financial institutions to decide on the allocation of capital. But one need not entirely depend on modeling and be out of reality as modeling will produce a statistical outcome depending on the data you feed into a set of equations or a simulation model. Modeling also involves issues such as focus on loss data, validation, calibration and issues on floors and ceilings. A practical issue on loss data is a different reporting system by banks, especially when it comes to large losses. Secondly, some institutions may not reveal large losses at all, but there are implications for operational risks. III.

To support philanthropy and non-profit organisations seeking to invest in Asia, the International Organisations Programme Office was set up in 2007 by the Singapore Economic Development Board as a whole-of-government effort to facilitate international organisations planning to locate in Singapore. The Government has also developed supporting physical infrastructure, such as the Tanglin International Centre for clustering and shared services. Connectivity 20. In addition, Singapore has excellent international transport and communications connectivity, and can serve as an intermediary for giving in the region. Our location and stable and safe environment provide international donors with a convenient base from which to oversee their giving in the region. Governance 21. Lastly, we cannot over-emphasise the importance of good governance in charities. Governments are working to address this issue. For example, last year, China launched the China Foundation Centre (CFC) to promote greater transparency and accountability among foundations. But there is still much that countries in Asia can do to improve charity governance. 22. Singapore, too, is working on improving governance. We have put in place a sound regulatory framework and a code of governance to ensure transparency and accountability of our local charity sector. In addition, the National Volunteer and Philanthropy Centre will also be introducing an independent charity analysis system this year. Conclusion 23. In closing, I would like to say that philanthropy makes the world a better place. It balances our emphasis on economic growth and the pursuit of profits with our warm, human side.