excellence in service. it is all about self - confidence. the social partners know what we must do to grow the economy, and each and every barbadian must remind ourselves that we have the power to contribute to our future prosperity. the private investment projects that will grow the economy are known, the government infrastructure has been identified, the financing is being put together, and the fiscal correction package is being stitched together in meetings between government and the other social partners. what remains is the piece that is up to each and every one of us, that is, to increase worker productivity and commitment to excellence. i am confident that we will each resolve to put our best efforts into playing our part in the revival of our economy, and to sustainable economic growth in the future. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

bust in several ways. first, the collateral calls generated by sharp movements in the mark - to - market value of the otc derivative trades drained liquidity buffers and provoked the fire sales of assets. these fire sales increased volatility and provoked still greater margin calls. this dynamic was one reason why the market prices of these assets overshot to the downside – that is they fell more than needed simply to reflect the increase in expected credit losses. in other words, the illiquidity risk premiums embedded into the prices of these assets became very large. second, the bilateral nature of the otc derivatives market – between the two parties to the contract – be it dealer and customer or dealer and dealer – created its own set of difficulties. when counterparties became concerned about the health of a particular dealer, they often moved their trades – via novation – to other dealers. they did this to protect themselves should the dealer subsequently fail. but this process was difficult to carry out quickly and in size. the cumbersome nature of the process disturbed market liquidity and function. it also tended to drain off the liquidity from the troubled dealers because these dealers often used the counterparty cash collateral to fund their own operations. when customers moved their bis central bankers ’ speeches business, the collateral balances departed with them and this worsened the funding crunch on the troubled dealers. third, when a large counterparty, lehman brothers, filed for bankruptcy, it could no longer meet its obligations. the claims of lehman ’ s customers, including those open otc derivatives positions in which lehman owed them money, were frozen. the lack of adequate segregation of the customers ’ assets from the lehman estate and the inability to move the outstanding obligations to other dealers – which we refer to as the lack of portability – created large problems for lehman ’ s counterparties. often lehman ’ s clients were in the position that one side of a trade executed with lehman was frozen, but the offsetting side remained open and exposed to volatile financial markets. this asymmetry contributed to the sharp increase in market volatility, the dramatic reduction in market liquidity, and the impairment in market function following the lehman failure. fear that this could happen again if another firm failed, encouraged flight from other dealers perceived by market participants to be relatively weak that might have large potential exposures. of course, as if this were not bad enough, the opaqueness of the otc derivatives market made the situation much worse. no one