delisle worrell : our financial system – fit for purpose? address by dr delisle worrell, governor of the central bank of barbados, to the barbados association of insurance and financial advisors, bridgetown, 26 april 2013. * * * how well does our financial system suit barbados ’ needs? in my address this morning i will examine how the system serves the needs of households and of businesses, and attempt to identify any gaps that should be attended to. i begin by discussing financial services for households. the main items of household credit are mortgages, and the financing of consumer durables. households and individuals are well served by banks, credit unions and finance companies, in the provision of financing of housing, durable consumption goods and amenities. adequate availability of this household finance, on affordable terms, significantly enhances the well - being of the population, which has the benefit of the goods over the period when they are repaying their loans. in an earlier period, before mortgages and consumer credit were widely available, consumers were deprived of the use of goods while they accumulated the funds for cash purchases. individuals and households are not as well served when it comes to alternatives for investing their savings. commercial banks offer poor returns on deposits, invariably below the rate of inflation ; the purchasing power of monies left on deposit at a bank is eroded over time. government paper is the most remunerative financial investment available to individuals. for those with gratuities and large amounts on which they need to earn interest, longer term securities are the best yielding. for those investing funds set aside for contingencies, savings bonds are the best bet. if held to their full term savings bonds carry an interest rate which keeps pace with inflation, and the bonds may be cashed in at any time if needed, albeit with an interest penalty. credit union shares and deposits at credit unions offer somewhat better returns than at banks, but deposits at credit unions are not yet insured, unlike bank deposits, which are protected up to a value of $ 25, 000. retirement income is vulnerable to inflation the financial system does not serve the needs of retirees very well because pensions are not adjusted in line with inflation in the typical domestic scheme. in less than a decade after retirement the average pensioner is unable to maintain his or her standard of living at retirement, purely because of the ravages of inflation, unless they have supplementary income. recent legislation mandating an inflation adjustment is a step in the right direction

##tagion assessments, and systemic risk surveys to provide valuable insights into potential vulnerabilities that affect the financial sector. apart from inter - regulatory coordination, rbi also actively engages with the industry through regular engagements / interactions including conferences with the boards of supervised entities, periodic meetings with the mds & ceos, heads of assurance functions as well as interactions with auditors. having discussed the importance of domestic coordination, i would also like to emphasise the significance of global supervisory cooperation. historically, crises have acted as catalysts for bringing supervisors together to address shared challenges. for instance, the basel committee on banking supervision was formed in the aftermath of the herstatt bank failure, highlighting the necessity for a coordinated response to systemic risks. however, we should not wait for crises to play out before strengthening international collaboration. greater engagement for proactive horizon scanning of potential risks and vulnerabilities, along with discussions on strategies to mitigate and address these challenges, can enhance our collective resilience and crisis preparedness. indeed, as a part of our agenda for the next decade, rbi @ 100, the reserve bank intends to engage more with the central banks of the global south. the reserve bank also aims to establish a global model of risk - focused supervision by fostering a strong 2 / 3 bis - central bankers'speeches risk discovery and compliance culture, building a " through - the - cycle " risk assessment framework. reserve bank is working to create a comprehensive data analytics ecosystem to support its supervisory functions. with these thoughts in mind, i look forward to a rich and insightful panel discussion on how central banks can continue to enhance financial stability and build a resilient global financial system. thank you! 3 / 3 bis - central bankers'speeches