to traditional insurance and reinsurance markets. more significantly, it recognizes the importance of applying a supervisory regime that has due regard to the specific nature, scale and complexity of various forms of captives. a primary objective of regulation for captives is promoting financial stability. in this respect, regulators will continue to be concerned with risks that may be created as a result of arbitrage and distortions to the broader insurance market. captives have an important contribution to offer. however, understanding risks relating to captives at a much deeper level, will be important to deliver regulatory outcomes that are proportionate and economically efficient. captive risks will differ from traditional insurance, and they also vary significantly between different types of captives, depending on ownership and structure, scope of business and nature of risks insured. managing these risks cannot simply be addressed at an institutional level. macroprudential 3 / 4 bis central bankers'speeches measures might have relevance in certain circumstances. for example, a pure captive insurer that merely underwrites the risks of its parent may pose low financial and consumer risks, but if the parent is an economically significant entity, with critical financial linkages, a different regulatory response and approach might be warranted. to a large extent, our ability to design suitable regulatory frameworks for captives remains constrained by the paucity of data on captives. this needs to be addressed as a matter of priority. broader measures need to be taken, both at a national and global level, to collect better data on captives to understand their nature, evolution and impact on macro - financial developments. increased efforts by governments to tackle profit shifting and tax base erosion ( beps ) have been another factor behind recent regulatory developments. significant changes have taken place affecting offshore financial centers in the past decade, shaped by heightened expectations for enhanced transparency and exchange of information between tax authorities. these winds of change are likely to pick up speed for captives. and they will change the way captives have operated in the past. very likely it would pave the way for the transformation of offshore financial centers. captives could metaphorsise from perceived brass plates models into legitimate commercial vehicles that serve a real economic purpose. perception management is pivotal for the future existence of captives. captives must be seen as supporting and contributing to the broader economic transformation and growth. these three developments ; the emergence of more diverse captive models serving a broader spectrum of companies, technological advancements and more considered regulations, are likely to foster a greater convergence between the intended economic outcomes of captives, and the required and appropriate

recorded an increase of 7. 8 per cent for the 12 - month period ending in february 2011. headline inflation for the month of february was minus 0. 4 per cent. with january ’ s decline of 0. 2 per cent, inflation for the 11 months of the fiscal year - to - date is 6. 7 per cent. it is now quite clear that the target for fiscal year 2010 / 11 is likely to be comfortably achieved. at the same time, there was a weaker than projected performance of the economy in terms of gdp growth last year. this came in the context of adverse local and international weather conditions ( tropical storm nicole, ash clouds in europe ) and the temporary fall - out that the economy experienced, particularly the tourism sector, from the disturbance in west kingston in may. however, looking forward to the next 12 months, it is expected that with lower interest rates and an abundance of credit resources there will be an increase in investments in the productive sectors of the economy. in this regard, the central bank is projecting gradual recovery in the coming fiscal year with gdp growth expected to be in the range of 1. 0 to 2. 0 per cent. the initiatives being spearheaded by the planning institute of jamaica to identify and synchronize high impact projects that enhance inner city communities, improve the economic infrastructure and protect the environment should result in a further acceleration of growth as they come on stream. ladies and gentlemen, interest rates in the money market are now at the lowest we have seen in several decades. this is not a phenomenon to pass over lightly. it has no doubt been brought about in part by the confidence exhibited by the multilateral financial institutions in jamaica ’ s economic programme, a confidence that has been affirmed by the credit rating agencies. of greater significance, confidence in the country ’ s economic prospects has been demonstrated by the willingness of local investors to accept lower and lower rates on their investments. foreign investors have also shared this optimism by their overwhelming participation in the global bond that was offered in february. with the policies that were undertaken in 2010, jamaica is being set firmly on a path for sustainable growth and development. the on - going reforms in the financial sector will further increase its stability and soundness. stable financial markets will reassure investors about the safety of their investments. ladies and gentlemen, fiscal year 2011 / 12 is set to be a year of accelerated progress and i urge you to be a part of the change. thank you. bis central bankers ’ speeches