are generally aware of the differences between banks and non - banks, and of the fact that non - banks may be more risky than banks. however, i would be the first to acknowledge that such an approach would not necessarily be the best for all other countries. in many countries, retail depositors typically use non - bank financial institutions rather than banks and it may therefore be important that those institutions are licensed and supervised. similarly, in some countries where there are perhaps thousands of licensed financial institutions and a very large population – and generous deposit insurance or a strong implicit government guarantee of bank deposits – it may well be desirable for the supervisor to check the bona fides of bank management. in new zealand, with its relatively small population and absence of deposit insurance, we are satisfied that the public is well able to make its own assessment of the quality of bank management and has an incentive to do so, and in these circumstances there is no need for the supervisor to take on this role. thus, while we strongly support the introduction of international standards in principle, we would not like to see a one - size - fits - all or checklist, tick - the - boxes, approach. international standards need to be interpreted with an appropriate degree of flexibility in order to adequately cater for the individual circumstances of each country. further, when devising supervisory policies we need to bear in mind not only the individual circumstances of our own countries but also the need to ensure that policies harness market forces to the extent possible, rather than undermine them. as alan greenspan said in 1997 : “ as financial transactions become increasingly rapid and complex, i believe we have no choice but to harness market forces, as best we can, to reinforce our supervisory objectives. the appeal of market - led discipline lies not only in its cost effectiveness and flexibility but also in its limited intrusiveness and its greater adaptability to changing financial environments. measures to enhance market discipline involve providing private investors the incentives and the means to reward good bank performance and penalise poor performance. expanded risk management disclosures by financial institutions is a significant step in this direction. ” 1 indeed, mr greenspan made the same point again exactly one month ago, when addressing the american bankers association in phoenix, arizona. in that speech he said : “ a one - size - fits - all approach to regulation and supervision is inefficient and, frankly, untenable in a world in which banks vary dramatically in terms of size, business mix, and appetite

rosanna costa : opening address - iv meeting of heads of financial risk management in central banks opening address by ms rosanna costa, governor of the central bank of chile, at the iv meeting of heads of financial risk management in central banks, santiago de chile, 26 april 2023. * * * good morning, i would like to extend a warm welcome to all participants at this fourth meeting of heads of financial risk management in central banks organized jointly by the center for latin american monetary studies, cemla and the banco central de costa rica, banco de espana, banco de mexico and banco central de chile. this initiative, whose first version was launched in 2020, has been consolidated as a forum for analysis and reflection to analyze current and emerging challenges of financial - risk management at central banks. throughout these meetings, topics related to the governance of risk management and financial risks have been addressed from different perspectives, in a context strongly dominated by the challenges that the covid19 pandemic has posed. every organization is subject to numerous contingencies that may hinder or prevent the normal fulfillment of its functions. in particular, institutions such as central banks, whose mandate has important effects on the economy and social welfare, must also consider not only their own risks when making decisions, but also broader risks in the financial sector and the macroeconomy in general. risk management aims precisely at identifying potential contingencies, appraising them and adopting adequate preventive measures to avoid their materialization as much as possible, as well as having in place timely response plans to correct or mitigate the impact of such contingencies as they occur. our experience at the central bank of chile at the central bank of chile, we are in constant search for improvements in integral risk management, understanding that it adds value to business processes by helping to prevent, among other things, interruptions in operations and damage to reputation. for risk management, we have a corporate governance structure headed by the board, senior management, a committee of independent experts ( the audit and compliance committee ) and the risk committee, which promotes the framework for the management of risks that may affect the bank's ability to achieve its mission, its vision and its strategic objectives. while risk - oriented functions had been in place for quite some time, in 2019 the bank created a unit to cover strategic, financial and non - financial risks ( corporate risk ). issues that have been addressed since then include comprehensive and consolidated 1 / 3 bis - central bankers'speeches