central bank of barbados tom adams financial centre, spry street, bridgetown p. o. box 1016 telephone : ( 246 ) 436 - 6870 : fax. ( 246 ) 436 - 7836 e - mail address : info @ centralbank. org. bb website : www. centralbank. org. bb remarks delivered by mr. cleviston haynes, governor ( ag ), central bank of barbados at the sagicor cave hill school of business and management conference on risk management and competitive intelligence. hilton hotel june 26, 2017 master of ceremonies, distinguished guests, ladies and gentlemen let me begin by congratulating the chsb for hosting this important conference that seeks to empower our leaders with the tools to manage risk in the dynamic environment in which we operate today. understanding and adapting to emerging risks and opportunities is essential if firms are to compete successfully in an increasingly technology driven competitive space where barriers to entry are being eroded rapidly. firms which formerly competed in the domestic market only can now, with a touch of a button, compete abroad or conversely face competition from abroad. it is in this context that i am honoured, therefore, to present this morning on the theme perspectives on growth in the caribbean. as a policymaker, i am acutely aware that the long term success of our business sector depends in part on how quickly and effectively we are able to create a policy framework that facilitates growth, builds confidence, stimulates innovation and encourages new investment. this is essential because some of the industries that have served us well in the past may not be viable in the new globalised environment. our capacity to grow strong competitive firms and develop new industries will therefore be critical. our responsiveness to emerging risks, whether as policymakers or as producers, is therefore crucial. understanding the challenges which each stakeholder faces is key to the long term sustainability of the economy and the development of strong competitive enterprises. in my presentation, therefore, i propose to share some insights on the recent growth experience in the economies of the caricom region. i will use the recent barbados experience to assist in illustrating the need for a sound macroeconomic framework to underpin sustainable growth. discussions on growth in caribbean economies are now topical. such discussions are often prefaced by the recognition that these economies are constrained by their small size in terms of land mass and population and are vulnerable to economic shocks and natural catastrophes. in addition, caribbean economies are distinguished by an absence of diversity in the goods produced and a

systems, and – an efficient regulatory regime that creates conditions favourable for financial contracts. 1. 5 drivers which are capital market specific as identified in the cgfs report include : – easy access to high - quality material information, – diversity in the investor base, – efficient market ecosystem for trading and robust market infrastructures, – openness towards international investors while maintaining macroeconomic stability, and – markets for hedging and funding securities. 1. 6 the cgfs report made six broad policy recommendations : ( i ) promoting greater market autonomy ; ( ii ) strengthening legal and judicial systems for investor protection ; ( iii ) enhancing regulatory independence and effectiveness ; ( iv ) increasing the depth and diversity of the domestic institutional investor base ; ( v ) opening up capital markets internationally in a bi - directional manner ; and ( vi ) developing complementary markets for derivatives, repo transactions and securities lending. 1. 7 policy initiatives in india have been largely in sync with the findings and recommendations of the cgfs report. i shall discuss these and future policy directions after providing a brief overview of the indian capital markets. while the scope of the cgfs report is the entire capital market, i will largely confine this speech to the markets regulated by the reserve bank, viz., interest rate markets and ( to a lesser extent ) foreign exchange markets. 2. overview of the indian capital markets 2. 1 indian capital markets have a history of more than a century. however, they remained largely inactive till the 1970s. partial liberalisation of the economy and procapital market policies during the 1980s infused some life into the markets, but it was only the economic liberalisation of the 1990s that provided a lasting impetus. today, segments of india ’ s capital markets are comparable with counterparts in many of the advanced economies in terms of efficiency ( price discovery ), tradability ( low impact cost ), resilience ( co - movement of rates across product classes and yield curves ), and stability. in particular, their ability to withstand several periods of stress, notably the asian financial crisis in 1997 - 98, the global financial crisis in 2007 - 09 and the “ taper tantrum ” episode in 2013, is a sign of their increasing maturity. 2. 2 in terms of size, all the major segments of the capital market, viz., central government securities ( g - sec ) market, market for state development loans ( sdl ), corporate bond market and equity market – – the so called “ cash