for more detail on certain aspects of the basel ii proposals in order to reduce uncertainty about what will be acceptable practice and what will not. my view is that these are not necessarily contradictory approaches. that is, we should take a principlesbased approach that is sufficiently clear about our expectations but that is not so detailed that supervisors become de facto managers of the bank. taking a more principles - based approach means that we must allow bankers some flexibility in meeting the requirements and permit a reasonable amount of diversity of practices across banking organizations. such flexibility will allow banks to use and easily improve their existing risk - measurement and - management practices. more to the point, we should actively encourage such improvements. while the improvements in risk measurement and management envisioned under basel ii will require banks to bear the cost of investing in systems and human capital, we believe these institutions would have made these investments in any event, as they seek ways to effectively manage their own increasingly complex risks. another important issue to consider is the impact of potential distortions or unintended consequences created by the new framework. for example, if we see unreasonable declines in capital requirements at individual institutions that do not appear to be supported by either the bank's own internal capital adequacy assessments or by our supervisory view of the institution's risks and how well these risks are managed, we may seek to mitigate the impact of these declines through supervisory review and direct discussions with banks under pillar 2 – which could result in discretionary changes to capital at individual institutions. we must also remain mindful of areas of the proposals that could unfairly tilt either the domestic or international competitive playing field if some banks have higher or lower capital requirements for certain activities or in the aggregate. one particular concern is that inconsistency in basel ii implementation across countries could put internationally active u. s. banks at a disadvantage and create advantages for u. s. investment banks and foreign banks. achieving broad international consistency will be a challenge, but we should all remember that this problem is not really new. the federal reserve and the other u. s. banking agencies have, for many years, worked with their international counterparts to limit the difficulties and burdens that have arisen as foreign banks have entered u. s. markets and as u. s. banks have established operations in other jurisdictions. we have continued this productive work with our colleagues overseas during the development and implementation of basel ii, but to most effectively tackle some of the issues that have come to our attention, we

. the new coupons are lower and maturities are longer, with limited issuance of short - term treasury bills. in addition, several of the new instruments will be redeemed in tranches rather than as bullets, enabling a gradual reduction in the debt stock. an added feature of some of the new securities structures is a natural disaster clause, which takes account of our nation ’ s vulnerability to natural disasters by affording government the option to defer debt service payments, on the occurrence of a catastrophic weather event. apart from the passage of the debt holder ( approval of debt restructuring ) act 2018, which gives effect to the debt restructuring, there have been consequential amendments to the existing body of legislation governing public debt issuances, namely the local loans, treasury bills and tax certificates and the savings bonds acts. in addition, parliament also passed the dematerialisation of government securities act 2018 to provide for the issuance of statements rather than physical certificates for the new instruments. this change to the issue format, as well as in the nature of the securities, has resulted in the need for the bank to alter its pre - existing software to facilitate ease of issue of statements. the process has taken somewhat longer than originally envisaged, but our staff has been working assiduously with our software providers to manage this transition in an effort to enable the timely issuance of the new statements. i have been advised that, pending any last minute technical glitches, the process for issuing statements in the new format should begin today. an important benefit of the issuance of securities in this book - entry format is the resultant settlement efficiency that can be facilitated. currently, the trading of government securities on the secondary capital market is characterised as thin and one impediment to trading activity is the length of time it takes for securities ’ transfers, with respect to the registration of ownership. with securities now being issued in a dematerialised, book - entry format, it is envisioned that secondary market activity will be executed more timely and efficiently, compared to what was feasible with physical certificates. the central bank is planning to introduce a web - based interface between its bond registry, the brokers and the barbados stock exchange, whereby brokers will have read - only access to verify the holdings of investors seeking to divest their securities. this will be supported by a messaging facility with the central bank to ensure that the transfer process is effectively completed. at the outset, it is unlikely that there