system, whether from internal weaknesses or external shocks can therefore quickly lead to a financial crisis. the resulting economic hardship can take years, or even decades, from which to recover. a very good example of this phenomenon was seen during and after the global financial crisis. vulnerability to climate change 1 / 6 bis - central bankers'speeches but let me start by addressing one of the major external risks to caribbean economies, namely the climate crisis. our region is one of the most vulnerable to the impact of climate change. indeed, when we refer to climate vulnerable economies, caribbean countries are always the highest ranked by any measure. rising sea levels, more intense storms such as hurricane beryl, which caused significant damage to a number of caribbean islands in late june, prolonged droughts, and flooding have become our unfortunate reality. these climate - related risks have a direct bearing on financial stability, as these systems don't just devastate homes and infrastructure, they can also have adverse effects on the financial system. for example, the destruction of infrastructure can lead to loans becoming nonperforming, as businesses and households may default on their debt. banks and other large financial entities in turn, may face liquidity problems, which can trigger a systemic crisis. furthermore, as governments attempt to rebuild after the event, this often leads to an increase in public debt, which puts further strain on their ability to finance essential services and infrastructure. imagine the strain on our resources that would have occurred had any of our islands been hit by the back - to - back hurricanes that recently devastated florida and other states along the us south coast. climate - related risks are particularly challenging to manage because of their unpredictable nature and the difficulty in quantifying their economic impact. caribbean regulators must therefore continuously monitor these risks and implement forwardlooking policies to mitigate their effects on the financial system. the impact of global economic shocks in addition to climate change, external economic shocks pose another serious risk to financial stability in the caribbean. our economies are heavily reliant on global trade, tourism, and remittances. any disturbance in the global economy such as a recessions in our major trading partners or sudden changes in commodity prices can ripple through our financial systems. take, for instance, the fallout from the covid - 19 pandemic, which brought the world to a standstill in 2020. it was an economic shock of unprecedented proportions for the caribbean. indeed, our tourism sector, a lifeline for many economies, came to

how good a firm's governance and risk management is. so it is critical that organisations are proactively attending to their culture and governance in the good times, to ensure they stand the test in the bad times. in this regard, boards should focus on ensuring their organisation has the right people, expertise, and experience – as well as the systems, processes and governance structures in place to run a firm well. it is about ensuring your firm is acting prudently, doing the right thing by your customers or investors and proactively scanning the horizon for potential new risks. this does not just happen throughout an organisation – but rather it takes time, thought, investment and commitment from senior leaders to deliver, along with a clear setting of culture and expectations by the board – who, as i said, play a key role from the topdown in ensuring accountability and driving the right culture in their businesses. necessary but not sufficient now, i have spoken of the important role governance, culture and risk management plays in successful firms. but while these things are necessary, and i would say fundamental, they are not sufficient. the right business model and the right strategic planning is also key. ones which recognise the risks, seize the opportunities, and indeed understand that there are risks from not taking some opportunities. steering the business model and strategic direction of the organisation is of course a core focus of boards and directors. so with this in mind, this brings me to a final point : what makes a good director? in the first instance i will bow to the iod, where they note a director should be capable of seeing company and business issues in a broad perspective, can bring a good degree of objectivity and can play a vital role in monitoring executive management and seek to ensure prudent control is exercised. 6 in addition to this good summation, i will add some of my own views on the key attributes for a director. it goes without saying that a good director needs to be strategic – both in the directionsetting for the organisation, but also in terms of your own contribution – what are you influencing and affecting ; what are you picking up? they need to be inquisitive. while knowing what you bring to the table is important, so too is the curiosity to ask questions and to probe for answers. this is particularly true for ineds, who need to verify and seek evidence – part of the independence they bring and ensuring they hold the board and senior management to account. 4