venture is undertaken. risk management is a discipline at the core of every bank and encompasses all the activities that affect its risk profile. banks in png can introduce risks into their operations through imprudent management practices. these include credit, operations and market risks. it is pleasing to note that banks in png are risk aware and have put in place necessary risk mitigation controls depending on their respective risk appetite. banks have generally achieved the various stages of defining, implementing and enforcing some risk framework to ensure that it is commensurate with the scope and complexity of its operations. i will now briefly touch on key risk areas that bpng focuses on in its reviews of the banks. bis central bankers ’ speeches capital risk bpng emphasizes that it is the responsibility of an institution ’ s board and senior management to ensure that the capital resources are appropriate to the size, business mix and complexity of the institution ’ s business. accordingly, the institution must have suitable systems in place to identify, manage and monitor the risks associated with its business activities, and to hold a level of capital that is commensurate with its overall risk profile. in controlling capital risk in the banking system, bpng has put in place requirements in the form of the capital adequacy prudential standard. the standard incorporates the minimum capital requirements as stated under the basel 1 accord. bpng has set the minimum capital ratios of an institution at 6 % ( leverage ratio ), 8 % ( tier 1 risk based capital ) and 12 % ( total risk based capital ). institutions are expected to have adequate buffers above the bpng minimum capital ratio. this may range from several percentage points for the smaller unsophisticated institutions to small margins for the larger institutions with sophisticated capital management systems. excessive leverage by banks is widely believed to have contributed to the recent global financial crisis. to address this, the international community has proposed the adoption of a non - risk - based capital measure, the leverage ratio, as an additional prudential tool to complement minimum capital adequacy requirements. its adoption can reduce the risk of excessive leverage building up in individual entities and in the financial system as a whole. it is pleasing to note that bpng is one step ahead as the leverage ratio forms part of our minimum capital requirements. adherence to these minimum standards has been a norm by the banking system and bpng has not experienced any adverse effects regarding capital run by the regulated institutions. as at end of march 2012,

the european parliament. the treaty establishing the european community contains various provisions to ensure the democratic accountability of the ecb, one of the cornerstones of which is certainly the presentation of the annual report to the european parliament and the council of the european union. however, apart from this annual exercise, the ecb and the european parliament have established several other contacts. first and possibly most importantly, i should like to mention the regular hearings held by the european parliament ’ s committee on economic and monetary affairs. within the scope of these hearings, which – in line with the european parliament ’ s rules of procedure – take place on a quarterly basis, i provide detailed explanations regarding both our assessment of current economic and monetary developments and the decisions taken by the ecb. transcripts of these hearings are published on the websites of both the european parliament and the ecb. moreover, the european parliament has invited members of the executive board of the ecb and staff of the ecb to participate in additional hearings on a number of specific issues, including the external representation of the eurosystem, the preparation of euro banknotes and statistical matters. furthermore, the ecb has also had the opportunity to welcome delegations of members of the european parliament ’ s committee on economic and monetary affairs to its premises in frankfurt. the ecb attaches great importance to these visits and will be pleased to continue to host such events. however, since these visits to the ecb are of a more informal nature, it goes without saying that they have to be considered as an additional tool for communication between the two institutions and cannot be seen as a substitute for regular public hearings at the european parliament. in setting up its communication policy, the ecb decided to go beyond the transparency requirements of the treaty. thus, while the treaty requires the ecb to publish a quarterly report on its activities, the ecb has decided to publish such a report on a monthly basis, the monthly bulletin, which gives a detailed presentation of economic and monetary developments. in addition, there are a number of other communication tools that the ecb regularly uses. first, let me mention the extended press conferences that the vice - president and i hold immediately after the first meeting of the governing council of the ecb every month, transcripts of which are also accessible via the ecb ’ s website. you may also be aware of the broad range of publications that the ecb has issued on specific subjects related to its fields of responsibility. i should like to draw your attention