transmit loss of confidence across the globe, central banks acted decisively to avert a total meltdown of the world financial system and to prevent an even more severe economic crisis. the challenge facing central banks around the world is planning and timing their exit strategies from unconventional policies so as not to jeopardise the recovery, whilst at the same time keeping close watch on possible inflation pressures that may start to emerge. the fact that we have stepped away from the brink should not allow complacency to creep in with regard to the repair work still required in terms of the reform of the international financial architecture and enhancing regulatory and supervisory standards in a coordinated manner. economic and financial conditions in south africa did not reach the stage where the bank had to broaden the scope of monetary policy to unconventional policies. in my view the interest rate policy within an inflation targeting framework and the flexible approach followed by the south african reserve bank in its implementation has served the country well and is a good basis to move forward from. thank you for your attention. references 1. opening remarks by william r white at the seventh bis annual conference on 26 – 27 june 2008 on “ whither monetary policy?, monetary policy challenges in the decade ahead ” 2. south african reserve bank monetary policy review, november 2009 3. unconventional monetary policies : an appraisal, claudio borio and piti disyatat, bank for international settlements working papers no 292, november 2009 4. challenges of inflation targeting for emerging - market economies : the south african case, brian kahn, south african reserve bank, 2008 5. south africa amidst the crisis, spire awards ceremony, mr a d mminele, deputy governor, south african reserve bank, 3 november 2009

loi m bakani : effective compliance, risk mitigation and control speech by mr loi m bakani, governor of the bank of papua new guinea, at the institute of banking and business management ( ibbm ) seminar on “ risk management ”, port moresby, 4 july 2012. * * * regulation and prudential supervision of banks the bank of papua new guinea ( bpng ) has regulatory and supervisory powers and duties over commercial banks under the central banking act 2000 ( cba ) and the banks and financial institutions act 2000 ( bfia ). prudential supervision is conducted through on - site inspections and off - site monitoring and involves licensing and policy work as well as enforcement and compliance. the bfia gives powers to the bpng to issue prudential standards or directives on matters relating to the supervision of banks. the central bank is also the regulator and supervisor of the superannuation and life insurance industries, savings and loan societies and micro - banks. in short, we supervise almost the whole financial system, except for the general insurance industry. my presentation however will focus only on the deposit taking institutions. risk based supervision in recent years, bpng has shifted away from the traditional rule based approach to regulation and supervision, and has adopted a risk - based approach, which is more risk focused. the bank recognises that supervisory practice is not a one size fits all approach ; instead institutions should be regulated and supervised based on their systemic importance. in this regard, the bank considers that regulation should be proportional to the systemic importance of the financial institution. for instance, savings and loans societies and micro - banks are tier iii institutions that play a key role in providing financial services for the unbanked population. as the risks undertaken by these institutions are high, they should have significant corporate governance, capital adequacy, liquidity, operations and credit risk issues. the bank has taken a deliberate approach to providing an advocacy and promotional role in working together with these institutions to promote the growth of financial intermediation in the monetisation of the economy that in turn ensures financial system stability and promotes economic growth. risk and risk management risks are inter - dependent and events affecting one area of risk can give rise to other categories of risk. from a regulators perspective, the most important thing is to understand the risks forced by the banks and to ensure that the risks are properly assessed, effectively controlled and managed. the risk profile of a bank changes every time a new business