single monetary policy for the entire region. the importance of the convergence criteria is another area that has attracted much scrutiny and analysis. as you know, the criteria sets limits for the level of inflation, the fiscal deficit, the variability of the exchange rate, and a floor on the level of foreign exchange reserves. the rationale for the criteria is that a higher level of convergence facilitates the conduct of common macroeconomic policies and obviates the need for special measures to correct imbalances in individual economies. let ’ s examine these two issues. in my view, the diversity in regional production structures is not wide enough to present unmanageable challenges. at any rate, problems of asymmetric shocks could be addressed by capital market mobility and by fiscal cross - border transfers. in fact, the region ’ s approach to the establishment of the single economy is to exploit the sizable complementarity that exists to facilitate the integrated development of the main production sectors. the issue of the convergence criteria is a bit more complicated. [ incidentally, i would like to congratulate the ccms for the very good work the institution has done for the last few years in monitoring the convergence criteria ]. having said this, however it is a fact that convergence criteria are only meaningful if they serve as an anchor for each country ’ s macroeconomic policies and as a disciplining device. to the best of my knowledge, there isn ’ t any case in the region where a country ’ s annual budget or its medium - term development recognizes or is specifically guided by the need to meet the convergence criteria. this is much unlike the case of the eu where an institution with political clout - the european monetary institute ( forerunner to the european central bank ) - was designated to monitor the convergence criteria, where these were seen as serious performance targets and where countries were expected to tailor their economic policies to ensure that the criteria were met. in our case, the convergence criteria are only informational ; they are not a guide to policy ; they carry no sanction, not even peer pressure. challenges the ineffectiveness of the convergence exercise underscores one of the principal challenges facing the region on the road to monetary union. this challenge has to do with the willingness of regional governments to transfer authority to regional institutions. perhaps the biggest challenge in this regard will be a decision to yield sovereignty over monetary policy to a regional central bank. the indifferent record of implementation of caricom decisions, combined with a less than robust approach to an

to central bank ’ s own story, as you will soon see. in the ramayana, the story goes that as a young prince, dashrath during a hunt, mistaking the sound of a pot being immersed in water for the sound of a deer quenching its thirst, accidentally shot dead a young man called shravan kumar. shravan kumar was fetching water for his old, blind parents. when they found out about the terrible death of their son, shravan kumar ’ s grief - stricken parents cursed dashrath that just as they are dying due to separation from their beloved son, so too would dashrath suffer and die due to loss of his son. this is the reason behind the exile of ram to the forest. shravan kumar epitomizes the dutiful son. his service to his parents cost him his life, but that was his fate, and his karma. shravan kumar ’ s tragic death triggered the entire events of the ramayana. over the past fifty years, central bank has been at the centre of three financial crises that were tragic and disruptive to our people ’ s lives … from failure of several finance houses and trust companies in the mid - 1980s to the collapse of the hindu credit union in 2008 and to the clico meltdown in early 2009. this is our karma. just like good eventually came out of shravan kumar ’ s death, so too we have been jolted into action to ensure good comes out from each financial crisis and to try and prevent similar tragedies from being repeated. just like shravan kumar is the dutiful son, central bank is the dutiful, national institution. before 2008, the typical person with a savings account, a mortgage, or an insurance policy never quite cared about who was keeping on an eye on the persons and institutions managing their money. now central bank is more scrutinized than the financial players themselves. like shravan kumar, we are honoured to accept the burden of our obligations, as we strive to protect our financial system beyond the next fifty years. our second story is about king dashrath. dashrath who accidentally kills shravan kumar eventually becomes king. he had granted one of his three wives, kaikeyi, two boons when she saved him during a battle. the day before dashrath was to crown rama as king, kaikeyi demands that dashrath grant her the two boons. her first demand is