and threats that could adversely affect the confidence in our banking and financial systems. as you all know, banks and non - bank financial institutions play a vital role in the economic development of any country. therefore, there is strong public interest in maintaining the stability and financial soundness of these institutions. and recognizing such importance, central banks have been entrusted with the responsibility of not only licensing but supervising them as well. the financial system is built on a fundamental ( and ever - present ) mismatch. savers want access to their money instantly, if necessary. but borrowers are usually unable to give it to them anything like as quickly. the banks have traditionally bridged that gap. but the only way they can do so is to borrow short and lend long. this mismatch makes them vulnerable. that is why governments have imposed regulations on the banks, requiring them to hold reserves against emergency. but if there is a complete loss of confidence among depositors, there is really not much an individual bank can do. the central bank is usually obliged to help. modern innovations in the financial system have seen banks, rather than holding on to the loans that they have made, parcelled them up and sold them on. the aim was to disperse risk ; in the case of default, it was better for a lot of investors to lose a little than for a few banks to lose a lot. however, all the clever types of “ securitization and structured products ” have not eliminated the fundamental mismatch. someone still has to borrow short and lend long. northern rock, the stricken british bank in recent weeks, is a case in point. in relation to this case, i just want to paraphrase an interesting article in the latest publication of the economist headed “ a generation has prospered from the wholesale transfer of risk through securitization. now it is paying the price ”. [ the chief executive of northern rock, mr adam applegarth, in unveiling his bank ’ s first - half results last july, announced that “ the medium - term outlook for the company is very positive, ” he spoke of a credit book that was “ robust ”. but, who would have guessed that less than two months later, britain ’ s fifth - largest mortgage lender would be fighting for its life, its branches besieged by customers demanding their savings back? the run on northern rock is the most dramatic symptom of the contagion gripping the financial markets.

confident that their knowledge and experience would be immensely helpful to the participants in understanding and appreciating the practical implications behind these changes both from a supervisor ’ s perspective as well as from the standpoint of the supervised institutions. to conclude, let me say that we all face enormous resource and capacity constraints in coping with existing responsibilities, let alone undertaking these new challenges. hence, the value of coming together to share our experiences and plan regional training programs for our member countries is very important. through these meetings, we can learn and maintain strong networking relationship which should enhance our efforts in capacity building in this innovative and challenging area of financial supervision. ladies and gentlemen, it gives me much pleasure to declare this regional seminar for financial supervisors open and i wish you all an enjoyable and fruitful week of discussions. thank you for your attention and may god bless you all. soifua.