“ stress test ” when it was conducted early last year – illustrates the importance of combining analysis by credit experts, forecasts and scenario design by macroeconomists, and hands - on judgments by supervisors in assessing the financial condition and potential vulnerabilities of large financial institutions. while considerable steps have been made in the wake of the financial crisis, the federal reserve intends to do a good deal more. the federal reserve also will continue to strengthen and expand its supervisory capabilities with a macro - prudential approach by drawing on its considerable data reporting, gathering, and analytical capabilities across many disciplines. in the areas in which we are collecting data through the supervisory process on measures of interlinkages and common exposures among the largest financial firms we supervise, we are developing new analytical tools that may lead us to change our information requests from supervised firms. the federal reserve is exploring how to develop analytically sophisticated measures of leverage and better measures of maturity transformation from information that we can collect from the supervised firms in the supervisory process and from other available data and analysis. we envision developing a robust set of key indicators of emerging risk concentrations and market stresses that would both supplement existing supervisory techniques and assist in the early identification of early trends that may have systemic significance and bear further inquiry. this kind of approach will require data that are produced more frequently than the often quarterly data gathered in regulatory reports, although not necessarily real - time or intraday, and reported soon after the fact, without the current, often long, reporting lags. these efforts will need to actively seek international cooperation as financial firms increasingly operate globally. the potential benefits of additional data improved data are essential for monitoring systemic risk and for implementing a macroprudential approach to supervision. the financial crisis highlighted the existence of interlinkages across financial institutions and between financial institutions and markets. credit risks were amplified by leverage and the high degree of maturity transformation, especially outside of traditional commercial banking institutions. moreover, supervision traditionally has tended to focus on the validity of regulated firms ’ private risk - management systems, which did not easily allow comparisons and aggregation across firms. one key feature of the recent crisis was the heavy reliance on short - term sources of funds to purchase long - term assets, which led to a poor match between the maturity structure of the firms ’ assets and liabilities. such maturity transformation is inherently fragile and leaves institutions and entire markets susceptible to runs. indeed, a regulatory, supervisory, and insurance framework was created during the great depression to counter this

even during the conflict period, the northern province accounted for 10 percent of the paddy production, 40 % of red onions, 10 % of chillies, 14 % of green gram and 25 % of ground nuts. these statistics indicate that there would be many viable income generating activities which could be promoted to upgrade the livelihood of the people, with the assistance of the banking sector. it has been estimated that 129, 000 fishermen, representing 20 percent of the total number of fishermen in our country, live in 219 fishing villages in the northern province. in the year 2006, the total fish production from the north stood at 25, 900 mt, representing 12 percent of the country ’ s total production. these facts also indicate that the income generating activities in the fisheries sector too could be developed substantially in the coastal areas with the provision of appropriate banking facilities, particularly for multi - day boats, fishing gear and other ancillary needs such as ice plants, and storage facilities. over the past several years, the central bank has also initiated several credit schemes applicable throughout the country, aimed at promoting regional development and poverty alleviation. in particular, work has commenced on a new poverty alleviation micro finance project to cover conflict - affected districts. approximately 3, 000 beneficiary groups with more than 12, 000 low - income families have already been organized within the jaffna peninsula under this project. we have also fast - tracked the agro - livestock development loan scheme, which is another scheme that could provide increased benefits to this province. my dear friends, during the several recent visits that i made to jaffna, i always made it a point to meet with the chambers of commerce officials, bankers, teachers, students, villagers, fishermen and many others. we received many valuable suggestions from them. in particular, we received too very useful ideas to open a central bank ’ s provincial office and to arrange for a special northern regional development fund for the northern province. i am glad to announce today that we will implement both such initiatives in the coming months. my dear friends, i thought it may also be appropriate to use this opportunity to make a special appeal to the sri lankan tamil diaspora, living in all parts of the world. the decades long conflict which sapped our combined energies in various ways, is finally behind us. therefore, it is now time for all of us to get together and rebuild our nation, in particular, the areas that have suffered. we, on our part, are keen to