risks. as this crisis develops, financial markets have witnessed, in an unprecedented manner, the unwinding of many contracts, even those backed by standard agreements like isda. on this note, i must stress that under - investment in human capacity and system of mid - and back - offices, as opposed to fronts, could prove costly. building the capacity of mid - and back - offices may require in - house investment, as recruitment from market may not be as easy as front - office, but possibly more important, a change in management culture, which can only come from leadership of top management. ladies and gentlemen, for those more conservative banks or financial markets, not affected in this first round hit, i also say that they cannot afford to be complacent. as in risk rating framework, it is neither the risk exposure nor risk management ability that determines bank ’ s riskiness, but the danger lies in the gap between the two. therefore, banks, though engaged in less complex products would still be at risk if their ability to manage such risk is lagging behind their products. indeed, the gap between risk exposure and management capacity becomes more important in a very volatile macroeconomic and financial environment. this is since such a gap may possibly emerge or expand undetected, given the dynamics of market events. even with plain vanilla products, the exposure can become complex due to the number of positions used for different hedges and at different strikes. this is not to mention the complex layers of counterparty, with counterparty risk and concentration risk. at such time as this, caution is vital, because even conservative banks could be exposed to market risk from domestic assets as well as currency risk. even if not directly, risks could come indirectly via the exposure of their clients, especially in the case of interlinked market and credit risks. the present environment also raises concerns of the close link between financial and reputation risks. banks or their affiliates, be they fund management or insurance arms, may have sold inappropriate products to clients without doing proper due customer diligence or education. as a result, clients ’ losses could lead to either bad assets and credit risk, counterparty risk, or reputation risk for banks if dissatisfied customers generate queue and protest in front of the banks, or even legal risk. in this environment of tight liquidity, and depositors have bargaining power, reputation risk and customer queue and loss of confidence could translate into liquidity risk. this brings me to the third risk implication from this

are generally low, we do not have many resources nor do we have the large population mass ( papua new guinea would be an exception of course ). all our problems require us, as pacific islanders, to be innovative thinkers and to think beyond the traditional and conventional norms of doing things in order to succeed. embracing technological innovation is important for this advancement. in fiji we have embraced the importance of adopting technological innovation to help us deliver financial services to the unbanked. we have noted an increase around the country in the number of bank agents, atms and the eftpos machines and whilst not all machine access points allow cash - in functions, the introduction of in - store or agent banking by commercial banks is beginning to see an increase in cash - in and cash - out points. undp www. undp. org / content / undp / en /... / pacific - islands - financial - services. bis central bankers ’ speeches in 2007 there were an average of 7 atms per 1, 000km² in fiji and this had increased to 12 by 2012. similarly, there were an average of 72 eftpos machines per 1, 000km² in 2007 and this had increased to 208 in 2012. the introduction of mobile network operators into the financial services and products space, through e - money transfers and bill payments, have further increased the outreach of financial inclusion. embracing technology has enabled us to increase delivery channels to reach our people. affordability given our similar problems in small island economies and the limited resources, the services provided will only be meaningfully utilised, and our efforts successful, if these services are affordable to the unbanked. all accessibility will be useless if our people are not in a position to pay for these services. the use of technology has brought about cost effectiveness in the delivery of these financial services. what does enhancing impact mean? ladies and gentlemen, let me now turn to the “ impact ” aspect of our theme. this is very important and i am glad that this is in the theme of this forum because it emphasises the fundamental reasons why we are doing what we are doing in this area. all the financial inclusion interventions we are embarking on must translate into a measureable outcome that impacts and enhances the lives of our people. all our strategies and policies must, in the end, have a measurable impact on our own individual countries and our region. if this is not our ultimate aim, then all we are undertaking is just