so, because you are working together. nevertheless, when you take up a position as a board member, you also have a responsibility to discharge your responsibility in a very professional and systematic manner. my dear friends, it is necessary for everyone to exercise a certain financial discipline within the organization. if the top people are lax, or if the board members do not ask the questions that need to be asked, then the tendency is for financial discipline to erode within the company. my dear chairmen and ceos, don't be frightened of, or upset with, the people who ask tough questions at board meetings. my dear directors, don't feel over - awed or shy to ask the tough questions at board meetings. you must do that. we want you, as directors, to do that because it is not possible for the department of supervision of non - bank financial institutions to be doing all the questioning from the chairmen & ceos. we are performing a regulatory function. we will see whether the overall framework is in place. we will want to see whether your overall risk assessment positioning is acceptable. but, the actual running of the business is your responsibility. you have to ask the tough questions. you have to ensure that sound internal controls are in place. you have to look at the future plans to ascertain whether you are on the right track. often, i have seen eminent and respectable people accepting board positions, but not getting involved in the governance of the company. that is not good enough, especially in finance companies. remember that your personal liability, will also be at stake in case of failure and such loss can be quite substantial if you have not taken the right steps. so, take the interest ; take the time to study, and, be diligent in your activities. actually, if you do that, you will find that it is much better for your company, much safer for yourself, much easier for the regulator, and much easier for the market. my dear friends, risk can be a sudden occurrence. risk can, at the same time, be slow in coming. you don ’ t know which risk is there, but you have to be alive to risk. today, management is all about risk management. what are the risks in doing something? what will be the repercussions? what will be the dangers? you have to think - safety first, just like how it is said at some of the modern construction sites. when you go

ajith nivard cabraal : harmonizing fiscal and monetary policies to deliver stability and growth text of the 18th annual oration by mr ajith nivard cabraal, governor of the central bank of sri lanka *, organized by the faculty of taxation, institute of chartered accountants of sri lanka, colombo, 27 august 2013. * * * * also : past president, institute of chartered accountants of sri lanka ; past president, south asian federation of accountants ; former secretary, ministry of plan implementation. chairman, mr. sujeewa rajapaksha, president, ca sri lanka ; honourable ministers ; his lordship mohan pieris, chief justice ; dr. p b jayasundera, secretary, ministry of finance & planning ; secretaries to ministries ; your excellencies ; mr. h. a. s. samaraweera, auditor general ; deputy governors and my colleagues at the central bank ; vice president and council members of ca sri lanka ; mr. n. r. gajendran, chairman, and members of the tax faculty of ca sri lanka ; mr. esmond satarasinghe ; fellow chartered accountants ; members of the business community ; my dear friends, at the outset, let me thank ca sri lanka for inviting me to deliver the 18th annual oration on taxation organized by the faculty of taxation of ca sri lanka. i consider myself deeply privileged to have this unique opportunity. i am further pleased because the topic of the oration, “ harmonizing fiscal and monetary policies to deliver sustainable growth and stability ” is one that is relevant and timely, since there are a large number of global and national developments which regularly underscore the vital importance of harmonization of the monetary and fiscal policies in countries as well as in regions. monetary policy and fiscal policy in order to set the backdrop for today ’ s oration, let me initially provide you with a brief insight as to what monetary policy and fiscal policy entails. monetary policy is the means by which a central bank seeks to achieve macroeconomic stability. in sri lanka, the authority responsible for the formulation and implementation of monetary policy is the central bank of sri lanka. the monetary law act no. 58 of 1949 is the legislation under which the central bank ( cb ) was established, and it provides a wide range of instruments that could be used by the central bank for monetary management. developments in the economy and the financial system have led to a gradual evolution of the objectives, and the framework for the conduct of monetary policy