estate prices rise, credit flows, foreign capital inflows increase, and the last thing on people ’ s minds is a downturn – our stress scenarios get tougher. and my first call to arms for academia this evening is for further research into indicators that can help to guide us in asking how bad it could be. 3 ) the system is not the sum of its parts my next principle concerns the stress tests themselves – where the stress scenario is applied to the system. it is to beware ; the system is not the sum of its parts. feedback loops within the system mean that the entities in the system can be individually resilient, but still collectively overwhelmed by the stress scenario. these are the feedback loops that helped to turn around $ 300 bn of subprime mortgage - related losses into well over $ 2. 5 trillion of potential write - downs in the global banking sector within a year. there are the obvious feedback loops that arise because entities have direct exposure to each other : think lending from one bank to another. the good news is that the importance of this loop is now negligible. unsecured interbank lending has contracted and banks are materially less leveraged. and this loop is now incorporated into our annual banking system stress test, so should it ever re - assert itself, we can ensure resilience keeps up. but we need to go further. at the next level are the feedback loops that link seemingly unrelated entities in the system. these are loops created by firesales of assets into illiquid markets, driving down market prices, forcing others to mark down the value of their holdings. this type of loop will be most aggressive when the fire - seller is funded through short - term debt. as asset prices fall, there is the threat of needing to repay that debt. but even financial companies that are completely safe in their own right, with little leverage, and making no promise that investors will get their money back, can contribute to these loops. all speeches are available online at www. bankofengland. co. uk / speeches the rapid growth of open - ended investment funds, offering the opportunity to invest in less liquid securities but still to redeem the investment at short notice, has been a sea change in the financial system since the crisis. assets under management in these funds now account for about 13 % of global financial assets. it raises a question about whether end investors, under an ‘ illusion of liquidity ’ created by the offer of short

amando m tetangco, jr : in praise of bsp ’ s top performers speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the 2009 bsp praise awarding ceremony, manila, 27 july 2010. * * * magandang tanghali sa inyong lahat! fellow central bankers and special guests, it is my pleasure to be part of today ’ s praise awarding ceremony where we celebrate service excellence at the bangko sentral ng pilipinas! in particular, we should be proud of our rich harvest : this year we have more than 400 awardees and nominees. indeed, our initiatives to advance employee performance continue to pay off. once again, therefore, let us salute all the nominees and winners under our 2009 praise awards with a well - deserved round of applause! let us also congratulate for a job well done all those who worked on our 2009 selection process under the praise committee headed by deputy governor andy suratos and assistant governor juan de zuniga! palakpakan din po natin sila. i understand that the interviews and evaluation of the nominees for all award categories have been quite intensive. that is because we truly have many bspers who deserve recognition and awards. tama ba ako? tama! let us also salute our iso awardees and reward them with a round of applause! ladies and gentlemen of the bsp. i have been a bsper for 36 years now. in my 3 ½ decades as a central banker, it has always been clear to me that the singular source of strength of the bank is its people. in fact, long before the lifting of the salary standardization, many bspers could be depended upon to render excellent work. and so, ladies and gentlemen, let us also salute central bankers past and present who under the salary standardization regime rendered praiseworthy service! palakpakan po natin sila! clearly, the commitment to serve our people and our country in the best way possible is a constant and strong motivation goal for all bspers. and now, with better incentives, better employee development programs, and continuously improving work conditions we are seeing broader and deeper commitment to always excel. i see this all around at the bsp : whether it is related to the performance of our core functions, institutional celebrations, employee activities, social programs, and even fundraising projects by the bsp employees association