pre - requisites to such regional plan are ( i ) agreement on what constitutes a systemic threat to the regional financial system ; ( ii ) the existence of information sharing protocols among regional jurisdictions ; ( iii ) agreement on the strategies to be considered in the resolution process and on the guiding principles for cost - sharing in the event that public intervention is deemed necessary. a crisis management plan for our region is likely to face several challenges, among which are differences in legislation or supervisory approaches across the region ; competing national priorities or differences in resource availability among the regional governments. the implementation of a regional crisis management plan requires a high level regional council with the authority to make binding decisions as to the use of resources. this could be another challenge in our current circumstances. i would like to make a few comments on one of the critical components of the idb - financed project – the preparation of comparable regional financial stability reports ( fsr ). we need to remember that these reports are designed to serve as early warning signals by pointing out to policy makers the key risks and vulnerabilities faced by policy makers. most financial stability reports do this by reporting the latest level of key financial soundness ratios. there is a new body of research that suggests the assessment value of these reports could be enhanced by including at least a qualitative discussion of the near term outlook for these ratios based on various policy assumptions. i fully recognize, of course, that the preparation of these fsrs is resource intensive and particularly challenging for smaller central banks. thus, conferences and seminars, like this one, where we bring our ideas and experiences together, are an invaluable learning opportunity. we need to leverage off each other if we are to do this exercise successfully. as all of you know all too well, the range of dis - aggregated commercial bank information that central banks in developed countries take for granted is sometimes difficult to collect in our region where the culture of disclosure is not deeply rooted. this makes our effort to develop fsrs all the more challenging but at the same time all the more necessary. let me end by wishing you all two days of very stimulating discussions. i am confident that this conference will further our efforts at strengthening regional financial stability and i thank the ccmf and the idb for making all this possible. bis central bankers ’ speeches

the ratings were due to the support and commitment of the parent company ( ghl ), its historical profitability and its adequate capitalization. you would notice the words “ adequate capitalization ” featuring in both cases. these words add even greater significance to the agreement we celebrate today. if my understanding is correct, the ifc ’ s investment of us $ 75 million involves a conversion of us $ 50 million of subordinated debt into equity, with the balance being an injection of new capital. as a result of the transaction shareholders ’ equity in ghl will be increased by close to $ 400 million. the ifc ’ s decision to partner with ghl through equity participation demonstrates its tremendous confidence in the local financial services industry, despite the challenges the sector currently faces. ghl, in turn, is expected to benefit from ifc ’ s considerable expertise and its association with a strong reputable partner, which has funds available for follow - up investments. from our vantage point, as regulator, this agreement sends precisely the right message to the insurance industry, and that is, the importance of adequate capitalisation. as you may ( or may not know ), with our legislation dating back to 1966, we are one of the few jurisdictions in the world that do not have robust capital requirements for the insurance industry. without doubt, this deficiency contributed greatly to clico ’ s problems. adequate risk - adjusted capital would not only have provided a buffer to absorb losses but moreover, would have acted as a dis - incentive to risk - taking since the greater the risk, the greater would have been the need to allocate scarce resources to capital. i am pleased to say that the bank is well advanced in the development of a new legislative framework for the insurance industry. this new framework will include a robust risk - based capital regime, a standardized actuarial methodology, tighter prudential arrangements, enhanced corporate governance and regulatory and supervisory practices, consistent with international best practices. fortunately some insurance companies, including guardian life and guardian general should be able to adapt easily to the new regulatory structure since they have already patterned their operations in order to meet higher standards. ladies and gentlemen, the central bank is very pleased to demonstrate its strong support for ghl ’ s capital raising initiative. it is an added bonus that ghl ’ s partner in this transaction is a progressive reputable global development institution with deep pockets. this partnership should bring significant benefits to the financial services industry in trinidad and tobago, and the caribbean.