agreement to specific protocols. a code of conduct is envisaged to provide a uniform framework for the contribution of stakeholders in order to achieve the common objectives set. public awareness on financial literacy through tailored campaigns is equally important, as it will facilitate the receptivity and usefulness of a national strategy for financial education. last but not least, a challenge lying ahead is the proper governance structure for the body that will undertake the implementation of the national strategy on financial literacy. international organisations such as the world bank2 have clearly opined that national strategies should be initiated, developed, and monitored by a credible and unbiased authority with financial education expertise and appropriate flexibility and resources. in many cases it is deemed that central banks can play such a role. concluding remarks at this point, i would like to emphasise once again my personal interest and my commitment to assist the committee's role in achieving its goals. enhancing the population's financial literacy is an ambitious but needed goal. through the cbc's 3 / 4 bis - central bankers'speeches actions over the past years and its coordinating role in the committee, we have shown that we consider the issue of utmost importance. moreover, in line with recommendations by international bodies such as the world bank, i would also like to express the willingness of the cbc to have a leading role in the implementation stage of the national strategy. i am positive that both the state and the private stakeholders share my belief that investing in financial literacy undoubtedly means investing in a sound financial future for our country and its people. it is now time for cyprus to take the bold step in this direction. i would like to wish you all a fruitful seminar and discussion. 1 panayiotis c. andreou & dennis philip, 2018. " financial knowledge among university students and implications for personal debt and fraudulent investments, " cyprus economic policy review, university of cyprus, economics research centre, vol. 12 ( 2 ), pages 3 - 23, december. 2 financial education programs and strategies approaches and available resources, january 2014, https : / / www. worldbank. org 4 / 4 bis - central bankers'speeches

pillar 3 of the framework lays down numerous requirements regarding the disclosure of qualitative and quantitative information about capital and risk, including in respect of risk transfer transactions. the importance of this information was thrown into sharp relief by the financial turmoil this summer, during which greater transparency, particularly regarding the nature and quality of assets recorded by credit institutions in securitisation vehicles, proved necessary. to sum up, and before trying to draw any preliminary conclusions from this turmoil aimed at optimal implementation of basel ii, i should like to emphasise that the new framework encourages banks to better assess and manage risks linked to securitisation transactions and to improve their financial reporting, two crucial areas in which the current problems have highlighted that significant progress needs to be made. 3. the financial turmoil has shown that optimal implementation of basel ii requires further progress in several areas. while it is too early to draw definitive conclusions from the current episode, it is nevertheless apparent that progress needs to be made by credit institutions, for example in the management of credit risk, market risk, liquidity risk, the risks associated with certain activities such as asset management and risks linked to the valuation methods used for some financial instruments. regarding credit risk : – it is important to check that banks ’ internal rating systems, along with the estimation of the different risk parameters they use, are updated in order to reflect the increase in default risk and losses in the wake of the current turmoil. it is indeed vital that these systems do not lead to risk being underestimated. this update appears all the more necessary at the present time given that in the case of real estate loan portfolios, estimates of risk parameters have perhaps not been sufficiently rigorously tailored by all banks to the specific features of some risky forms of credit such as us subprime mortgages. the same thing may have happened in other countries. in a more general way, it seems useful that supervisors should continue their analysis of the ways in which banks take account of the specific features of certain financial assets whose risk profile may be higher than that of the regulatory asset classes defined in basel ii ; – we need also to deal better with the issue – crucial for some assets such as housing loans and specialised financing – of the correlation between probabilities of default ( pd ) and loss given default ( lgd ). this may be quite variable depending on the characteristics of housing loans in different countries. more generally, we need to analyse in greater depth the ways in which banks take into account the