emsley tromp : the significance of innovation for the central bank against the background of a changing kingdom speech by dr emsley tromp, president of the central bank of curacao and sint maarten, at the national economic forum, organized by fundashon pro inovashon nashonal, curacao, 14 october 2013. * * * ladies and gentlemen, good evening. fundashon pro inovashon nashonal has made an excellent choice in recognizing the importance of innovation in tonight ’ s event. 1 the world in which we live is changing in fundamental ways, and our traditional models for understanding it no longer work very well. innovation can provide us with new models for adapting to our changing world. we all experience innovation in our day - to - day lives without being fully aware of its significance, its potential, and its challenges. what is innovation? the conference board of canada defines innovation as “ the process through which economic and social value is extracted from knowledge through the generation, development, and implementation of ideas to produce new or improved strategies, capabilities, products, services, or processes. ” simply put, innovation can be described as the introduction of something new. the something new can be a new idea, a new device, or a new method of doing something. something new does not necessarily have to be something entirely new ; it can be an improvement of something that already exists. in addition, innovations can be tangible or intangible. tangible innovations include, for example, new or improved products, such as a tablet computer, a smart phone, and led bulbs. examples of intangible innovations include new or improved computer programs, and business, industrial, and biotechnology processes. a new product or process cannot automatically be considered an innovation. an innovation must contribute to something useful, such as increasing productivity, reducing costs, improving our health, protecting the environment, or using fewer fossil fuels. we also must realize that a successful innovation in one country, industry, or company does not automatically translate into success when applied in another country, industry, or company. different circumstances will produce different results, one of which can be failure. therefore, it is very important to make sure that the necessary conditions exist or can be created to increase the chance that innovations will produce the desired results. i see an important role for fundashon pro inovashon nashonal in promoting research and increasing awareness among the government, the business community, and the general public to make

ifs sector came to a halt with the termination of the tax treaty with the united states and the abolishment of the u. s. foreign withholding tax in 1985. in addition, the sector was also negatively affected by other developments, such as the negative connotation of global tax planning and increased bundling as tax - exempt region. over the past years, however, curacao has taken several measures to meet international standards. one of the main measures taken was the enactment of a new fiscal regime in 2002 to be in full compliance with the policies of the organization for economic cooperation and development ( oecd ) for fair tax practices. the new tax regime was created in line with the recommendations offered by the oecd, to avoid being labeled as a jurisdiction with harmful tax practices, and thus was intended to avert inclusion on the oecd ’ s ‘ black - list ’ of non - transparent offshore jurisdictions in 2000. ladies and gentlemen, let us now continue with the main challenges the ifs sector is facing. with the implementation of global regulatory standards, including anti - money laundering ( “ aml ” ) and combatting financing of terrorism ( “ cft ” ) rules, banks have faced increased compliance costs in providing correspondent banking relations. in addition, tax information - sharing agreements that also result in more costs for the banks have added to the de - risking trend, which resulted in the ending of correspondent banking relations. both the domestic banking sector and the international financial services sector in the caribbean face this challenge. a correspondent banking relation is crucial for financial institutions in the caribbean, given their limited access to foreign financial markets. furthermore, without a correspondent banking relation, caribbean financial institutions cannot properly service clients ’ accounts. recently, many correspondent banks have terminated their relations because of the high perceived risks of the caribbean and latin american region. in the monetary union of curacao and sint maarten, however, the cbcs has informed correspondent banks on the effective implementation of aml - cft regulations, and positive assessments of the caribbean financial action task force ( cfatf ), which have led to favorable results. for example, jp morgan has recently reinstated its correspondent relation with two major banks in curacao. the cbcs is continuing with its efforts toward correspondent relations to attain more of these favorable results, and thus minimize the de - risking effects. the cbcs has always been active in promoting financial stability and minimizing risks via sound prudential and