auditors have advised us that under this new accounting classification, we do not have to take the unrealized losses to the profit and loss statement of the bank. very recently, we therefore decided to liquidate all of our bond holdings. we will then reclassify the new bonds that we are going to buy under the new classification. this example shows some of the issues around reserve management and the allocation of assets. as i have said, we have a benchmark which is anchored on the maintenance of value of our foreign reserves. we have liquidity guidelines. the question that is normally posed is : what about return? this becomes more critical when reserves are falling as what is happening in fiji now. the temptation is perhaps to abandon your benchmark in search for higher return. to me this is a dangerous road to take. you may end up in a win - win situation. but you may also end up in a loose - loose situation too! my risk - averse nature as a central banker compels me to keep to our benchmark and protect values then look for return in the better allocation of assets. this workshop addresses many of these asset allocation issues and i am certain will add value to how we manage our foreign reserves. the contents of your workshop are relevant and interesting. i know that you will have an interesting 5 days. we may have different levels when it comes to reserve management methods and capacities. therefore, please freely share your country experience during the course of the workshop and in the case studies. i find that this sharing is one of the best parts of what we take home after such workshop. and please keep your network intact after the workshop so you may be able to help your colleagues in some way. there is also the related issue of how important is the central bank ’ s profits. reserve management is the major source of our revenue. while we predominantly spend this revenue on the important role of monetary policy and financial stability, i am of the view that we cannot totally ignore the strength of our balance sheets. not so much from the point of view of funding the government budget, but more so from the confidence that a strong balance sheet gives to the financial system. conclusion i wish you all a fruitful week of discussions and deliberations. please also take some time away from your workshop to enjoy suva. once again, i thank the imf, the resource persons and the organizers for putting together this workshop. official opening i have much pleasure in declaring this workshop

public authorities can contribute to financial integration by developing a common technical infrastructure. it is no coincidence that in the areas where such common infrastructure is missing, then integration is less well developed. the repo market, which is still hampered by a multitude of securities clearing and settlement systems, gives a still unfortunate example of that phenomenon. another example is the adoption of the eonia rate, which underscores how market participants play an important role in fostering financial integration through the adoption of market conventions. the eonia rate, which stands for euro over - night index average, is the effective interest rate in the euro unsecured overnight interbank market. the technical definition and the procedures for calculation of the rate have been defined by market participants through a series of market conventions, which were key for the integration of this market segment. in this respect, i should also mention that ecb has a role in the process because it fixes the eonia rate as a service to the banking sector. this illustrates that public bodies can indirectly foster financial integration by acting as a facilitator in private sector initiatives. the third challenge is the design of public standards for risk management. weaknesses in clearing and settlement arrangements can be a source of systemic risk. it is therefore paramount that effective risk management standards are applied by clearing and settlement systems. however, competition entails the risk that the service providers might try to improve competitiveness by applying more lenient risk management standards. given the potential systemic effects of the failure of a major clearing and settlement system, the operators might assume that central banks will eventually bail it out and they might therefore not have sufficient incentives to address risks effectively. against this background, the ecb takes the view that the establishment of public standards for risk management is essential. in fact, the eurosystem has set such standards that securities settlement systems need to comply with in order to be eligible for the use in our credit operations. all interested parties should be actively involved in the development and implementation of such standards. at the g10 level, standards for securities settlement systems have been developed by a joint task force in which both the committee on payment and settlement systems ( cpss ) and the international organisation of securities commissions ( iosco ) are represented. the fruitful experience gained in this co - operation has encouraged similar work at the eu level. for this purpose, the escb has established a framework for co - operation with the committee of european securities regulators ( cesr ), primarily aimed at assessing how the