buffer. the new regulations involve a higher minimum capital ratio as well as heavier risk weights for specific activities. for proprietary trading, which caused large losses during the crisis, and investments in resecuritisations, a complex and relatively high - risk financial instrument, banks will have to hold much larger capital buffers. still, in good times, risks may again be underestimated. therefore the new regulations also set a limit for leverage regardless of risk weights. to further ensure the build - up of additional buffers in good times and enhance the capacity of banks to absorb losses in bad times, the basel iii framework introduces dynamic capital requirements. these come on top of the minimum capital requirements that must be met at all times and by all banks. the dynamic buffer consists of two parts. one part, the capital conservation buffer, relates the build - up of buffers to the profits of an individual bank. the other part, the countercyclical buffer, relates it to conditions in the economy at large. this is truly a novelty : for the first time in history, a macroprudential element has been included in international banking regulations. bis central bankers ’ speeches on top of the minimum and dynamic requirements, there will be a capital surcharge for systemically important banks. this will make those banks whose failure would pose the greatest threat to the financial system yet a little bit safer. the second key element of the current reforms concerns liquidity requirements. these are essential to make the financial system more stable. liquidity and maturity transformation is at the core of the banking business and provides a large benefit to the economy. it enables households and companies to earn interest on savings that they can access at any time, while providing essential long - term financing to the economy. however, when excessive, maturity transformation creates a vulnerability to market shocks and can become a source of instability to the financial system. during the crisis, insufficient management of liquidity risk emerged as a major problem. even well - capitalised financial institutions experienced liquidity problems and central banks needed to intervene, including with unconventional measures, to provide large scale financing and thereby prevent further escalation. therefore the new liquidity requirements, introduced as part of the basel iii framework, are of utmost importance. they require banks to hold sufficient high quality liquid assets to cover net cash outflows for a period of 30 days under a stress scenario. in addition, they set minimum requirements for the use of long - term and stable funding sources to finance

small business entrepreneurs. in february 2008, through the auspices of the commonwealth secretariat, the central bank secured the services of an expert to prepare a basic “ how - to ” handbook for the small business sector. the expert ’ s work was reviewed by the major stakeholders in the sector and the result is the series of three pamphlets, entitled “ living the entrepreneurial dream ”, which we launch today. the first item of this series, “ start - up and operational issues for small and micro enterprises ”, addresses issues of relevance to new entrepreneurs. it includes a segment aimed at assisting persons in identifying whether they are really ready to start a business. it also deals with the critical aspects of business planning and cautions the aspiring entrepreneur of some of the risks and challenges involved in managing a business. the second booklet in the series, “ record keeping – how to keep financial records for your business ” underscores to small and micro entrepreneurs, the critical importance of keeping proper financial records. through the use of illustrations, templates and examples, the booklet provides the users with information that can assist them in maintaining proper cash - flow records, separating their personal from their business finances and continually monitoring the performance of the business. the third booklet of the series, “ financial services – where to find assistance for your business ” is a directory of the available agencies and organizations through which small and micro - entrepreneurs can obtain financial and other assistance such as training and mentorship. this particular booklet is important, since many persons who want to enter into business or who are already in business are not aware of the wide - ranging opportunities that are available to them. these booklets are not the end of the road, however. in collaboration with nedco, the chamber of commerce, ytepp, etc. we shall be training a number of potential trainers to disseminate our sme material to their sme clients or persons who are planning on owning their own business. to this end we are completing an “ instructors manual ” and “ trainees workbook ” both of which will be published and utilized in a series of sme train - the - trainer sessions. i am pleased to note, ladies and gentlemen, that the bank ’ s interest and work on financial education for small business have been actively supported by the inter - american development bank, through its multi - lateral investment fund ( mif ) and by the trinidad and tobago chamber of commerce. we also launch today, ladies and gentlemen, an insurance publication entitled “ protecting your