of fx, debt market and interest rates, amcm insisted on a prudent and sturdy investment strategy and arrangement, which embodied the target of maintaining the value and enhancing income for our fx reserves and reserve fund. the substantial fx reserves provide fundamental guarantee for stable convertibility of the local currency. the mastering of financial information and related statistics enables regulators and practitioners to perform self - assessment in respect of their own results. such information also provides valuable and pivotal reference for policy formulation. last year, amcm kicked off a series of timely and innovative surveys and disseminations of statistics, including credits granted by local banks to small and medium sized enterprises, international business of banks, use of locally issued credit cards and balances, and mortgage loans granted by banks. in addition, we reinforced our cooperation and communication with international financial organizations. we followed closely the requirements of international financial statistics by participating in organizational information dissemination mechanisms. in this way, we continuously enhance the reputation of our financial sector internationally which will arouse the interest of international funds to share our development. it also promotes the level of internationalization of our financial sector. moreover, participation in training and communication involving international financial institutions will enhance our capability in professional research and analysis, reinforce credibility and authority in the course of financial policy formulation and implementation. looking forward to 2010, international financial scenario is still riding on its v shape rebound, following the recovery of major economies. we are not yet sure of an utter recovery, but we see light from the other end of the tunnel in the midst of fluctuations. however, there are still many factors of uncertainty which may give rise to changes, especially the “ exit strategy ” contemplated by a number of nations. the act will no doubt wreak havoc on the nascent economic recovery. as an open regional economy, macao is not immune to the fluctuations of external economies. therefore, we should stay vigilant against even the smallest changes in the international financial markets and be ready to master the information to formulate preventive measures in a timely manner, so as to reduce the impact of adverse factors inflicted on the overall economy and financial system. as regulator, we hope to work with market participants to pay close attention to the future development of the markets, maintain close communication and cooperation with each other to take on all possible difficulties and challenges. the word “ crisis ” in chinese language is composed of two words ; danger and opportunity. in the face of a crisis, we also clearly see opportunities ahead. the central government has reiterated

the governor of the central bank of barbados had indicated the need for the formation of credit rating agencies in the region to be of assistance to investors who do not have the time or the training to conduct their own credit analyses. she was at the time discussing regional capital market developments and the fact that there must be a credit culture in which investors in general should be able to accurately evaluate risks and returns and determine investment and financing trends, based on the results derived from such evaluation exercises. i am pleased to inform you that the caribbean community has finally established its own rating agency, the caribbean information & credit rating agency limited. the agency has a capital base of three million dollars and is the world ’ s first regional credit rating agency offering rating products in 19 countries. crisil limited, india ’ s leading ratings, financial news, risk and policy advisory company, provided the technical assistance and has acquired a 9 % stake in the agency and its managing director and ceo is on the board of the rating agency. crisil will continue to provide the assistance to the agency to ensure the stability of the operations. this establishment of a regional credit rating agency is indeed a positive step towards a regional approach to critical issues. the agency will commence operations in october 2004. as our region continues its move to the csme we must also be prepared for increased competition especially in the area of jobs as the marketplace becomes more unified. it is very important that our professional resources must become multi - tasked and multi - disciplined in order to be flexible enough to adapt to the new challenges. this is an area that member states must be able to manage efficiently through cooperation. i now turn to the issue of consolidated supervision the concept of consolidated supervision has been around for a while. the basel committee on banking supervision has been promoting this concept by developing a series of best practices for banking supervisors including the core principles for effective banking supervision ( 1997 ) that has become the world standard for effective banking supervision. those countries in our region which have experienced fsaps by the multilateral agencies such as the imf and world bank, would know the importance of adhering to these core principles. furthermore, the imminent introduction of the new capital accord ( basel ii ) has renewed focus on this area as there is an assumption in the basel ii methodology that consolidated supervision is practised. the implications of the foregoing in terms of supervisory oversight are serious as the banking organizations in our region continue to be in an expansionary mode external to their home environment. to quote from