to build models that capture the essence of our economies, and that surely cannot be a mirror of the us. technology is changing today ’ s world at an ever more furious pace. does it still make sense – if it ever did – to think of economic transactions in equilibrium terms? largely because of technological change, and the changes in societies that have resulted, the world of today is very different from societies of even 30 years ago. are models grounded in principles dating back more than a century still relevant? the failure to be sufficiently specific may explain why we offer so little practical guidance to policy makers. here are some of the issues about which central bankers have to make decisions. how do we assess regional financial stability in the caribbean? what financial soundness indicators ( fsis ) are appropriate and useful for this integrated financial region? what early bis central bankers ’ speeches warning systems do we need for a region where cross border risks have been the most troublesome in recent times? the market behaviour of caribbean exchange rates in an era of consolidated treasury management is proving somewhat of a conundrum. the changing cash management strategies of conglomerate firms, foreign investors and multinational banks are resulting in fundamental changes to the way our foreign exchange markets work. we need research into these markets. we need alternative approaches to interest rate determination and more realistic models of interest rate effects. we have tested the interest sensitivity of loans every which way, and one thing is clear : small changes, of the orders of magnitude common in industrial countries, have little effect. we need better indicators of fiscal sustainability on the open economy. we keep talking about debt sustainability when we should be discussing fiscal sustainability. and we need to distinguish the problematic from the unsustainable, if our advice is to be taken seriously. we need to test the limits to countercyclical policy in small open economies. the models we borrow from less open economies fail to take account of the early onset of the foreign exchange constraint in our economies. the annual monetary studies conference is well established and productive, a gathering we all look forward to. the papers are interesting enough, in a conventional sort of way. but now we need to take the extra steps to make this a truly exciting meeting, a place to try out new concepts, new models, and different ways of thinking about our problems. and we need to be a bit more down to earth, to speak more directly to policy makers. that means we have to ask more relevant questions in our research. we may continue to

##mise that regulations relating to aml / cft and the increase in the number of cross - border money remittance or transfer companies could be contributing factors to this declining trend. in the case of the money remittance companies, it can be argued that global banks may have concerns about the high risks of uncertainty in facilitating transactions with unknown / nonvetted clients, especially those in emde ’ s 1, in terms of the aml / cft 2 rules. this raises the potential for fines and reputational risks for these banks and therefore reduces the appetite for exposure to specific jurisdictions by banks participating in this environment. there are emerging markets and developing economies ( emdes ). aml – anti money laundering ; cft – counter terrorist financing. bis central bankers ’ speeches also potential downsides to decreased cross - border transactions. for example, it is a wellknown fact that money remittances attract high costs, and it is therefore likely that small companies would be more affected by the reduction in global correspondent activity. in both instances, it would be the poor and smaller commercial entities that would be most vulnerable if correspondent banking activities are not replaced by more efficient and reliable alternatives. regional solutions, implemented in the payment system environment, will go a long way to address constraints that may be introduced by the reduction of correspondent banking services, as well as to bring overall efficiencies in the execution of intra - regional cross border payments. i would now like to share with you developments relating to three of these regional initiatives as examples. in 2000, five countries of west africa ( gambia, ghana, guinea, nigeria and sierra leone ) established the west african monetary zone ( wamz ). at the same time they also set - up the west african monetary institute ( wami ). liberia joined in 2010. the objective of the countries was to establish the west african monetary zone ( wamz ) as a monetary and customs union with a common currency. initially they proposed to introduce a single currency in 2003, but subsequently agreed to launch the new single currency in 2015. as these countries are represented at this conference, you will benefit from updates on progress made with this initiative. the main objectives of wamz were agreed as : • the promotion of trade integration in the region ; • trade and financial facilitation ; • harmonisation of legislation and statistics ; and • payment systems and macroeconomic convergence. the wami was established as the main body responsible of the creation of