and this, in turn, has encouraged greater financial inclusion for which i commend the local credit union movement. nonetheless, the growth and development of the credit union sector has taken place within a legislative framework that does not provide for formal prudential regulation and supervision. as you know, the present legislation governing the credit union movement – the co - operative societies act – dates back to 1971 and falls short of a prudential framework to protect members ’ savings and to help safeguard the integrity of the domestic financial system. i am reminded of the insightful words of independent senator subas ramkhelawan during his contribution last december to the debate on the securities industry bill. senator ramkhelawan indicated that “ financial regulation on the whole is like the building of a fortress, and it is important in the building of a fortress that all the walls must be equally fortified, because the marauders at the gate will always look for the weakest point to infiltrate ”. bis central bankers ’ speeches we have indeed seen the marauders at the gate, breaching the fortress of regulation, both in the insurance and credit union sectors. and we are still experiencing the painful emotional and financial costs to our citizens and to our economy. accordingly, i would like to take the opportunity this morning to speak about issues related to the new proposed regulatory regime for credit unions, which is expected to come into effect sometime in the second half of 2013. • first, i will explain why the central bank should be the prudential regulator for credit unions in trinidad and tobago ; • second, i wish to highlight the key principles underlying the proposed credit union regulatory regime, and the fundamental differences between the co - operative societies acts and the draft credit union bill ; and • finally, i will address some lingering concerns of the national credit union movement. prudential regulation of the credit union sector by the central bank ladies and gentlemen, many of you would recall that the cabinet decision in july 2005 to bring credit unions under the regulatory authority of the central bank was initially met with disquiet by the credit union movement. this uneasiness, perhaps rightly so at that time, stemmed from the fear that the central bank did not really understand the unique character of credit unions and would unfairly treat them just like banks. the fact that the original proposal to bring credit unions under the regulatory authority of the central bank envisaged a division of the movement by asset size did little to ease these fears. i am

ewart s williams : trinidad and tobago ’ s secondary market for government securities opening remarks by mr ewart s williams, governor of the central bank of trinidad and tobago, at the launch of secondary market for government securities, port - of - spain, 28 january 2008. * * * an important aspect of the mandate of any central bank and particularly a central bank of a developing country is the development of an active capital market. why? because an efficient capital market is an indispensable requirement for sustainable economic transformation. the reasons for this are well - known to you, i am sure, but let me simply re - iterate a few of them. an efficient capital market : • supports the mobilization of domestic savings by providing investors with alternatives for investment and risk diversification. • permits companies and governments to raise long term resources at lower cost. • promotes efficiency and competition in the financial system. • creates an avenue for the population to participate in the corporate sector and share in its wealth. there is a more or less widely recognized sequencing for capital market development and it goes like this : • it usually starts with treasury bill issues, to fund government ’ s short term financing needs and the formation of some kind of money market in which there is the trading of short term funds – a good example is the inter - bank money market. • the second stage is usually a primary government securities market where government issues bonds to help finance capital projects. in the early stages, government securities may be issued to a captive market – for instance to pension funds and insurance companies to help them meet statutory requirements. during this stage, the distribution process tends to be non - transparent and, in a seller ’ s market, at below - market interest rates. • as the economic transformation process evolves, governments seek to promote a third stage – that is the development of a rudimentary equities market. with these basic structures in place efforts are focused on refining and improving the infrastructure related to the government securities and equities market … until, there is a move to the third stage, that is : • the development of a secondary market in government securities and a bit later, a market for corporate securities and a derivatives market. these stages very often overlap and small developing countries seldom move beyond the state of primary government bond issuance and illiquid equity markets. we in trinidad and tobago are trying to move beyond the limitations dictated by small size to create a diversified capital market to facilitate the process of economic transformation and