economy? could specific monetary policy measures adopted by the ecb weaken the transmission mechanism by negatively affecting banks ’ profits and capital accumulation and hence lower the incentives for banks to engage in lending activities? many factors are at work, and disentangling the impact of the app from that of other measures is of capital importance in informing the monetary policymakers ’ decisions. yet, it is no easy task ; and that is why solid, in - depth analysis, looking at these issues from different angles and with different tools, is surely needed. the first part of today ’ s workshop will provide several interesting papers which attempt at doing that. the second half will deal with another question that is being asked in the monetary policy debate, namely whether the current, extraordinarily expansionary monetary policy stance is inducing excessive risk - taking and thereby possibly igniting tomorrow ’ s financial crises. low interest rates and yields make investors inclined to search - for - yield and embark on riskier investment strategies. up to a point, this is not an unintended consequence of the current monetary policy measures, but actually part of the hoped - for transmission mechanism. portfolio rebalancing is a key component of the mechanism that is expected to transmit the app to the real economy. it is conceivable, however, that this may eventually go too far and the amount of risk - taking induced by the eurosystem ’ s monetary policy exceeds what is optimal and results in more costs than benefits. i do not think there is any evidence that this is happening so far at the aggregate level. there are localized tensions, particularly in the property market in certain member states ; these need to be tackled, and are being tackled, by macroprudential measures. opinions on the respective roles of monetary policy and macro prudential tools differ, as is perhaps natural given that macro - prudential policy is still in its infancy ; more research on these topics is therefore welcome. looking at today ’ s impressive collection of papers, i have no doubt that the workshop will go a long way towards providing us with answers to many of the questions i listed. i very much look forward to hearing about your findings and the outcome of your discussions. before the presentations begin, i would like to thank all those that contributed to this workshop, both from the banca d ’ italia and from other national central banks of escb or academia. i wish you all a most successful workshop, and a pleasant stay in rome and at the

rick houenipwela : credit unions – legal & compliance opening address by mr rick houenipwela, governor of the central bank of solomon islands, at the credit unions legal & compliance workshop, honiara, 16 - 17 april 2008. * * * introduction salutations : presidents, managers, board & committee members of respective credit unions ; general manager of sicul ; media representatives ; ladies and gentlemen : i am pleased to welcome you all this morning to mark the opening of your workshop on the topic “ credit unions : legal & compliance ” that you will cover in the next two days. this is the second workshop that cbsi and the office of registrar of credit unions have conducted in the past 12 months for credit unions that are members of the solomon islands credit union league. the first was held for the board of directors and management of the central malaita credit union limited in september 2007, on the topic : “ strategic planning and loan delinquency control. ” this is yet another example to demonstrate the central bank ’ s long term commitment to support the development of credit unions in our country. let me now turn to the subject of this morning ’ s topic, which you will be covering in the next two days. in emphasizing the importance of this workshop, i would like to make three points. legal compliance first, i want to stress that it is vital for credit unions to comply with the legal requirements in their operations. it is important for you as a board or a member of the management team to understand that your credit union is set up under a legal framework. that legal framework requires you to conduct and manage your business in accordance with the provisions of the credit union act and its standard by - laws and regulations. while some credit unions are trying to comply, it is sad to note that non - compliance is still a wide spread problem in many credit unions. some examples of areas for compliance include submission of timely audited financial statements and reports, holding of annual general meetings, proper election of officer bearers and paying your dues to the solomon islands credit union league ( sicul ). i hope as a result of this workshop, we will see more effective compliance with the legal requirements under the credit unions act 1986. role of credit union in the development the financial system i turn to my second point : where do credit unions fit in the financial system and what is their role in the development of the financial system? let me reiterate that the cbsi takes