distance financial services ; strengthening the banking system, thanks to which in the recent crisis, banks were not part of the problem but of the solution. while we are mindful of the verified claim that trade is an adventure, and banking – cautiousness, history has taught us that a conservative approach, with a careful introduction of new products and care for the clients, is the best way to develop the system and grow sustainably. and the most critical point – solutions, would not be sustainable without macroeconomic stability over the past ten years. what else have we done? a turning point was created in the country where even at the start of the 21st century embers of fear due to the recent memories of the hyperinflation in the early 1990s were still glowing, and where the average annual inflation between the financial crisis of 2008 and 2012 equalled 9 %. namely, we built confidence in the local currency and ensured growth in dinar savings even during the pandemic. corporates and citizens know they can plan investments and spending without the fear of sudden changes in the exchange rate. we also endorsed development potential of our society, often by leading the technological advancement. today we speak about the mass - scale use of instant payments in serbia in various forms. we use the options provided by video - identification for distance financial services. serbia has become a country with technological solutions which the region looks up to. what are the future challenges? today, when some think that policies can be conducted via twitter or newspapers, it is our obligation to remain committed to decisions based on data and detailed analyses. next, we are still living in a time when fake news spread fast and expectations are not easily managed. but managing them is not impossible, either. we have to be aware that the words we use matter, and that confidence can be preserved only by achieving results. ahead of us is also a period when the knowledge base will be strengthened through a constant study of the effects of our policies and our actions. these will be important lessons 2 / 3 bis central bankers'speeches for the future. ahead of us is also the strengthening of human capital. in order to respond quickly and efficiently to modern day challenges, in accordance with democratic principles, in future we will also need people able to make impartial and responsible decisions in the general interest. conveying knowledge and developing human capital – that is the best investment for the future. we also need to join forces to achieve our full potential. many challenges of today are not

while some other banks in the same jurisdiction, might adopt the standardised approach. since the irb approach is more risk sensitive vis - a - vis the standardised approach, a small change in the degree of risk could result in a large additional capital requirement for the banks following the irb approach - which would dissuade such banks from assuming high - risk exposures. from a systemic point of view, therefore, the banks adopting the standardised approach, and consequently, having a greater concentration of high - risk assets in their portfolio, could perhaps become vulnerable in times of economic downturns. these issues would need to be appropriately taken into account while deciding on the implementation of the basel ii. implementation challenges in developing countries even though it has been mentioned in several places that over 100 countries had implemented basel i, the assessments done in 71 countries as a part of financial sector assessment program ( fsap ) have revealed many deficiencies in the areas of risk management, consolidated supervision and corrective action for undercapitalised institutions, which are considered to be crucial to sound supervision and proper basel ii implementation. while a supervisory system which is fully or largely compliant with basel core principle 6, which incorporates basel i as the capital adequacy standard, is considered necessary for moving to basel ii, the assessments reveal that about 37 % of these countries had not complied with this core principle. the remaining countries were at various stages of compliance. given this level of compliance, the challenges that are likely to be faced by the developing economies in implementing the basel ii framework, will be daunting. as acknowledged by the imf, they do not have adequate internal expertise to assess and assist basel ii implementation in various jurisdictions. given the complexities of financial regulation and the added complexities of the basel ii framework, which will have to be specifically tailored to suit the domestic economies and the domestic banking systems, the regulators are right in insisting on the freedom and flexibility for adopting and implementing an appropriate roadmap without being constrained by any external pressures, direct or indirect. the ideal solution for managing a complex task of this nature is through mutual cooperation and assistance amongst the central banks. dangers of asymmetry in financial intermediation a likely scenario, which might arise post - basel ii implementation, is the asymmetry in regulatory regime amongst the competing broad segments of the financial sector viz., banking, securities and insurance sectors. while the commercial banking sector is expected to migrate to the basel ii regimen