interests are at risk. banking in this country is, in most areas, highly competitive, and the industry has proven itself to be highly resilient. to survive and be effective, banks must be willing and able to take risk. revenue, shareholder equity, and if necessary the bank insurance fund are there to deal with mistakes. put differently, while public policy needs to limit the financial and social costs of bank failures, we should not view every bank failure as a supervisory or regulatory failure. it is not our role to prevent all failures, let alone to guard against every earnings decline. indeed, to do our jobs well, we should understand that the essential economic function of banks is to take risk, and that means mistakes will sometimes be made. a perfectly safe bank, holding a portfolio of treasury bills, is not doing the economy or its shareholders any good. the experience of the early 1990s illustrates the process of recovery after a period of excessive risktaking. a decade ago, many regional and money center banks were reeling from excessive commercial real estate lending and still - substantial holdings of weak foreign country loans. meanwhile, many agricultural banks were only then recovering from their own bout with problem credits that had proved too heavy for hundreds of other banks to bear. the fdic was reporting that the bank insurance fund was nearly drained, while the general accounting office was saying that, in substance, it already was. banks nationwide were tightening their credit standards and cutting access to credit for many firms, producing a “ credit crunch. ” it was clear that change was needed. the industry needed to resolve its problems, improve its risk management practices, and construct new strategies that would provide more stability in lending markets and more competitive, long - term returns to investors. for their part, bank supervisors needed to pay more attention to emerging weaknesses and deal with them more quickly. solving the immediate problem of weak asset quality and improving the industry ’ s overall profitability was, of course, the first priority, and fortunately that was accomplished sooner than anyone expected. by the mid - 1990s, u. s. banks were enjoying stronger portfolios and higher earnings than they had seen in recent memory, attesting to the underlying strength and resiliency of our banking system. during the past decade, the industry ’ s profitability has arguably climbed to its highest level ever, as large banks finally joined small ones in achieving annual returns on average assets in excess of 1 percent. to be sure, no one wants to repeat the experience of the

, what and how the funds were spent ( according to budget or if there is a case of misuse of funds ). finally, the society can be the vehicle, at the least, for us get to know each other in our profession and exchange views and ideas, and socialize. networking is an important element of every professional ’ s working life today. i as the governor of the central bank of png welcome very much the birth of this society and encourage all who are eligible to become members. i have asked all my economics graduate staff to join. the bank supports this course as evident by it being the very first entity to make a financial donation to the society, under the former governor. this fund has enabled the society to set itself up and eventually arrange this launching. i encourage other employers of economists to assist the society in its endeavours so it can grow and meet its strategic objectives, and for the enhancement of the profession in the country. i note and appreciate all the efforts by the four interim executives in initiating and ensuring the birth of this society through the formal incorporation of the society by ipa under association incorporation act on 19th december 2007 and in organizing the launching. it has taken this long to have the society formally launched but the important thing is the moment has arrived and it is happening now. thank you very much for that. i am also pleased to note that the society will hold its first full meeting in one month time to elect the first full office bearers. i encourage all you potential members to pay up your membership fees so you can be able to vote on that day and support the society to see it mature through time from this birth. let us take pride in our profession and in this moment – the launching of the ekonomic society of papua new guinea. with all these words, i hereby declare that the ekonomic society of papua new guinea is launched. thank you.