important step in this direction is the draft law on payments that is expected to provide impulse for new companies with innovative, but safe financial services. this workshop is conceived as a platform for getting better insight in the fintech developments, exchanging opinions, sharing ideas with a view of drawing the outlines of our future fintech strategy. in this light, i am delighted to invite mr. tikam to share with us part of his rich experience and knowledge on this topic. mr. tikam is an experienced executive level advisor with 26 years commercial experience, having played multifaceted roles, with the last 22 years in financial services. having in mind mr. tikam ’ s proficiency, i have no doubts that today we will have fruitful discussions and valuable exchange of experiences to the benefit of all participants. mr. tikam, thank you for your efforts in making this workshop happen. the floor is yours. 1 / 1 bis central bankers'speeches

exercise should go hand in hand. it is remarkably similar when we move to the macroeconomic front. as we discussed earlier, monetary policy has an important role, among other things, in guiding financial markets and facilitating the conditions for internal and external balance. but attempts, say, to reduce interest rates to stimulate economic growth won ’ t succeed if for example, heavy public sector borrowing puts upward pressure on interest rates ( the fiscal side ) or if private businesses are unwilling to take up credit as they are discouraged from pursuing export or other opportunities by too much red tape ( the structural side ). in essence, in an economy dominated by energy as trinidad and tobago, fiscal policy leads the way. but structural policy is arguably no less important. consider the case of large exchange rate adjustments in latin america versus east asia. experience over the past few years suggests that in several latin american countries a large devaluation ( accompanied by complementary fiscal actions ) did help to bring about external balance6. but most of this came about because of a huge compression in imports — as opposed to a meaningful rise in exports — because it was very difficult for businesses to quickly shift production to take advantage of the lower prices of their exports in international markets. in contrast, in asian territories like japan and south korea, production is generally ramped up quite rapidly once any price advantage appears! the upshot is that structural reforms, geared to make an economy much more dynamic, efficient and responsive, can pay rich dividends. there are certainly many areas in trinidad and tobago that can benefit from such reforms, via concerted action towards changes in legislation, institutions, attitudes, technology, modernization of standards and strengthened accountability. 12. at the same time, constant attention must be paid to avoiding excessive central bank financing of governments, given the implications for inflation. one of the functions of many central banks ( including in trinidad and tobago ) is to act as banker to governments. one may ask then, shouldn ’ t a banker provide credit facilities to its client? when the banker is a central bank, it is vital to keep in mind that, unlike other banks, this institution has the power to ‘ create ’ money ( including most noticeably, cash ) ; a huge amount of money created by the central bank can then lead to high inflation. the capacity to create money then is why central bankers are concerned about excessive financing of government deficits7. a bis survey of central banks in 1999 found that the majority were not required, and often not allowed, to