shows. 6 however, as with all evidence - based policymaking, conclusions must be continuously reviewed and updated as necessary. it was with this in mind that the ecb recently made adjustments to negative rates, introducing tiering for excess reserves. on another occasion, a detailed evidence - based analysis showed that concerns that unconventional policies worsen inequality were unfounded, 7 and this strengthened the ecb ’ s resolve to pursue its policy path. this is not to say that experts – the ecb included – have perfect knowledge. theories can have blind spots and forecasts can be proven wrong. the crisis revealed that the conviction then prevailing among economists that financial markets could largely self - regulate was misplaced. indeed, as robert shiller has explained, both the public and experts can fall victim to “ narrative epidemics ” which can have an adverse impact on the economy. 8 the answer to this, however, is not to reject the value of knowledge. it is for those with expert knowledge to continuously re - examine the evidence, scrutinise their prior assumptions and listen to dissenting voices. policymakers depend on dissent to hold a mirror up to their actions and to break the power of dominant narratives. this is vital to the advancement of knowledge and is the foundation of all scientific progress. for those tasked with making decisions, nothing can replace rigorous analysis accompanied by experience. courage knowledge can only go so far, however. once the facts have been established as best they can, then comes the decision to act. and in economic policy, as with other policy, all actions have side effects and unintended consequences. there are situations in which even the best analysis does not provide enough certainty to render making a decision easy ; it is often tempting not to make a decision at all. but this is precisely the point at which policymakers must draw on the second quality : courage. for inaction is also a decision. when the effect of inaction would be to compromise the mandate conferred on the policymaker by the legislator, the decision not to act is a decision to fail. there are many instances when policymakers are compelled to act knowing that the consequences of their decisions are uncertain. but they do so in the confidence that doing nothing would lead to an outcome considerably worse and cause them to betray their mandate. over the past decade of crisis, the need to take decisions, even critical ones, often faced three hurdles : fear that not all potential complications had been considered, opposition from vested interests and doubts about the

today, we envisage many benefits to both countries. trade relationships between papua new guinea and fiji will be strengthened. we will see increased competition for banking services and products. there will also be an opportunity for capacity building as fiji staff work in other bsp branches and vice versa. we at the reserve bank of fiji look forward to working closely with bank of south pacific limited to ensure that fiji ’ s financial system is dynamic and sound. i look forward to your contribution to the economy and the financial system. once again, i congratulate you on the official opening of bank of south pacific limited and wish you every success in your operations. thank you.