william j mcdonough : completing the journey to the new basel accord remarks by mr william j mcdonough, president and chief executive officer of the federal reserve bank of new york, before the twelfth international conference of banking supervisors, cape town, south africa, 18 september 2002. * * * introduction and overview as the chairman of the basel committee on banking supervision, i am honored to welcome you today to the twelfth international conference of banking supervisors. i would like to thank our hosts, governor mboweni and the staff of the south african reserve bank, as well as my colleague, andrew crockett, and the bank for international settlements, for organizing our gathering here in cape town. i ’ m sure you ’ ll agree that they ’ ve done an excellent job. it appears to me, and probably to many of you, that south africans have discovered a wonderful niche for themselves as hosts of auspicious international gatherings, having just concluded the world summit on sustainable development in johannesburg a few weeks ago. so if you ’ re visiting this beautiful country for the first time, i have a feeling that you may be back in south africa someday in the future. participants at the united nations summit in johannesburg sought ways to improve the lives of people everywhere by focusing on, among other goals, alleviating poverty and promoting economic growth. bank supervisors and central bankers certainly share those goals. through our duty to ensure the safety and soundness of the financial system, we aim to preserve depositors ’ savings, to promote the circulation of credit, and ultimately to protect the health and growth of our economies. indeed, we cannot alleviate poverty, we cannot promote economic growth unless our banks are well managed, our financial systems stable, and our markets transparent and open. that the health of an economy depends to a great degree on whether its banks are financially sound and well managed is certainly not coincidental. banks are charged with critical public trust to safeguard the public ’ s wealth and to serve as a source of credit to consumers and businesses alike. when banks fail to discharge these tasks responsibly, the costs to society can be high and the impact on the economy devastating. at the same time, the duty for supervisors to promote the safety and soundness of the banking system entails achieving a delicate balance. ensuring the prudent management of banks does not mean that we should hinder their growth or profit. rather, the supervisor ’ s job is to promote the responsible pursuit of opportunity and innovation. likewise

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