led to the dominance of the sector by a single company. in the non - bank financial sector we saw new competition entering by way of foreign and regional financial institutions. the credit union movement, which has grown in stature in the past few years, become a significant socio - economic organisation that caters in a large part, to a section of the population which had limited access to credit from commercial banks. they grew in strength and became as large as some of the smaller banks but stopped short of fully challenging them on their own terms. new entrants to the market led to commercial banks became highly competitive, bidding down interest rates by outdoing each other in the marketing of loans. the distribution sector continued to be an important recipient of credit, and the banking system facilitated this import orientation. financing of imports continued to receive a major part of the bank ’ s portfolio despite efforts to mitigate reliance on this sector. efforts to change this through credit controls worked for a time until methods were found to get around it through leasing, direct lending and other means of financing and until the emphasis on market forces made such approaches appear inconsistent with modern trends. the central bank through its discount schemes offered facilities to key sectors so as to give priority to the productive sectors – in an attempt to encourage a change in lending orientation but the demand for these services remained low. i take this opportunity to encourage the use of the small business guarantee services which have been offered by the central bank and which have been heavily underutilised. i would urge banks to encourage their customers to use them more frequently. drivers of change however, liberalisation of the financial industry over the past two decades has helped to support creative financial markets throughout the region, particularly in trinidad and jamaica, and seems poised to drive the same type of evolution in barbados. at the same time, changes in technology have lead to the creation of new financial products and services to automated teller machines to customer credit checks at the teller and to some the development of e - banking. these changing financial industry dynamics have facilitated a growing trend towards increased efficiencies but have entailed major capital outlays. increased liberalisation has been accompanied by an increase in the level of oversight and regulation of the financial system. while it is important not to over - deregulate the need for regulation particularly in the area of finance became more important. greater market orientation needed to be supported by policies that discouraged inappropriate behaviour, but encouraged competition, hence the regulatory framework for the financial sector

in place to increase access to financing for micro - enterprises at the government level, the banking sector with its large network of branches can become an important channel to enhance its services to this sub - sector. conclusion i envisage further expansion in selected markets outside barbados will likely become a key strategy for a number of the large domestic financial institutions. i expect in the near future that since credit unions in barbados will begin to match commercial banks in the range and quality of the services provided and that they will become virtual replacements for indigenous commercial banks. while the insurance companies which owned banks have disposed of their interests, greater coordination in the regulation of the financial sector will still likely occur as the services supplied by banks and insurance companies become less distinct. already registered retirement savings plans offered by commercial banks resemble an insurance product. in the future pension funds and insurance companies could become more integrated as individuals seek to supplement their pensions, following on the new pensions act. within the csme cross - border capital flows are likely to increase and a greater convergence of the financial system is likely to occur. cross - border ownership of shares in financial institutions is likely to increase and customers are likely to become more discerning as they compare products offered in other jurisdictions in the region. greater competition could mean that national development goals may have to struggle to re - assert themselves. emphasis in profitability and on credit ratings may mean that social and national economic objectives may become even more secondary to financial outcomes. this is likely to place greater onus on moral suasion and on assertions by government of national priorities. i envisage however, that the domestic financial landscape will evolve into a financial environment that will emerge to meet the future demands of the economy. we must aim for a world - class financial system that is best able to contribute to economic growth in an environment of financial stability. i wish you a most informative panel discussion session and i thank you for your attention. i now formally launch the public forum of the uwi alumni and the barbados institute of banking and finance.