therefore raising capital domestically is not easy ; • funding is based on domestic deposits and there is limited wholesale or external funding. the absence of an effective secondary market for government securities, coupled with deposit funding that has some concentrations and a limited retail component, requires banks to manage their liquidity more stringently ; • technological innovations giving rise to new products poses challenges in understanding how they work and impact on the financial system ; • high security and fraud risk ( and cost ) exist in this country where violence and crime are a real problem ( frequent challenges from armed robbery, internal fraud, civil commotion, and other security and corruption related risks are reported ). utilities services are unreliable and robust contingency planning against business disruption is essential ; and • with the private sector credit growth and the development of the lng project, there are possibilities that new products will be introduced into the foreign exchange market to cater for the needs of customers, • especially businesses involved directly or indirectly with the lng project. bpng would need to step up in regulating this emerging market. bis central bankers ’ speeches bpng is prepared to deal with these challenges to ensure that our supervision results in a sound and prudently managed financial system in png as experienced to date. thank you. bis central bankers ’ speeches

at the auction was increased from k100, 000 to k500, 000. recent media commentaries have suggested that the central bank ’ s actions are adversely affecting small investors. however, these actions are consistent with the bank ’ s objective of price stability and aim to encourage the development of the secondary market for government securities, thereby promoting a vibrant financial market and system. small investors can purchase treasury bills from fund managers, stock brokers ( capital stock brokers and kina securities ) and other finance houses with amounts of k10, 000. 3. the central bank the financial reforms since 2000 have involved changes to the various acts, which the bank of png operates under. besides the commercial banks, finance companies, and savings and loan societies, we now oversee the life insurance companies, superannuation funds, and the micro credit schemes. the central bank also encourages the establishment of savings and loan societies to provide complementary financial services to those provided by the banks, finance companies and the existing savings and loan societies. this is one important mechanism of ensuring financial services reach our people in the outside centers and rural communities. as at the end of june 2004, there were twenty - one ( 21 ) active savings and loan societies. there are now three types of saving and loan societies : employer - based societies such as teachers and elcom ; provincial - based societies like the east new britain savings and loan society ; and superannuation - based societies for their members. provincial - based societies are flavoured in a fashion that membership is open to those living in the province and those who are from the province but are living or working outside the province. the workers outside the province who contribute to such societies find it beneficial when they go home for holidays and need to obtain financial resources. the central bank stands ready to assist those willing and able to establish their savings and loan society, providing advice and ensuring sound management practices, and systems support. may i publicly warn against the fast - money schemes or pyramid schemes. we have clamped down on the operators of these schemes. the central bank continues to work with the law enforcing agencies to stamp up these illegal schemes, which have created financial problems for many of our people. i acknowledge and am most thankful for the assistance from the police in this aspect. we have also taken out advertisements listing the licensed financial institutions and warning the public on the illegal schemes. the central bank can only do so much - we need the public ’ s support - your support and the support from the media -