nontraditional mortgages, particularly the " payment shock " if the loan's interest rate increases, or when the consumer is required to make fully amortizing payments. it is important for consumers to have the information necessary to understand the features and risks of these types of mortgages. as bankers create more complex products, they should pay particular attention to improving the quality of their disclosures and sales practices, so that consumers can clearly understand the features of those products. the federal reserve is committed to improving the information consumers receive about these products, including improving the disclosures required under the u. s. truth in lending act. as we work to improve the understanding of disclosure information to consumers, the federal reserve also engages in outreach activities and conducts research to help us better understand consumer behavior and inform our judgment with regard to the best approaches to achieve consumer understanding. to this end, we sponsor consumer surveys, hold public hearings, discuss issues with our consumer advisory council, and conduct consumer focus groups and other types of consumer testing. conclusion the topics i have focused on this morning, portfolio concentration risk in cre, improved risk sensitivity of basel ii, enterprise wide compliance of bsa / aml and clear communication to consumers about complex products, emphasize that risk management needs to be integrated into daily operations of banks. as an organization chooses to accept more risk exposure to implement its strategies, it is imperative that the organization strengthen its risk management practices appropriately. a bank should clearly understand the implications of the risks it chooses to accept, ensure that the risk mitigants it has chosen work effectively, and that capital is strong enough to support the bank throughout an extended period of unexpected losses. i would also like to note that the federal reserve has an excellent working relationship with the financial services authority and the bank of england. we have worked together effectively on bankspecific issues and broader questions of regulatory policy and financial stability. while there is a wide range of issues with which supervisors must grapple, including those i have discussed today, i believe that supervisory cooperation can indeed create a safe and sound global marketplace while allowing financial institutions to remain prosperous.

tarisa watanagase : the changing financial environment and implications for central banks welcome address by dr tarisa watanagase, governor of the bank of thailand, at the 27th seanza governors ’ symposium, bangkok, 20 september 2008. * * * fellow governors, distinguished guests, ladies and gentlemen, it is my privilege to extend a warm welcome to all seanza governors and distinguished participants to the 27th governors ’ symposium and the central banking course. at the outset, i would like to take this opportunity to express my sincere gratitude to mr. jaime caruana, the former governor of the bank of spain, and currently the counsellor and director of the monetary and capital markets department of the imf, who flew half way around the world to be with us today to share his views and enrich us with his experiences from a global perspective. this year ’ s theme of the governors ’ symposium is “ the changing financial environment and implications for central banks ”. i believe you would all agree that the discussions on this topic couldn ’ t have come at a more appropriate time, given the current financial market turbulence we are encountering today. right now, all eyes are focusing on what solution central banks will come up with to resolve the current global crisis. this gathering is the first regional meeting of governors amidst the turmoil, and so we should take this opportunity to exchange views and reflect on how the financial environment which is undergoing a major transformation as we speak, will have implications on our roles as central banks. looking at the overall picture, what is now going on in wall street may remind us of what happened in our region 11 years ago. at a glance, the root causes of both events are strikingly similar : investors taking excessively high risks creating asset price bubbles, against the background of lax prudential and monetary policy. with today ’ s financial environment, however, changes in the regulatory requirements, market players, business models of financial firms, as well as economic conditions have all played a part in escalating the impact of financial turmoil through the creation of a broader and deeper financial system. what is unfolding right now is taking place in the world ’ s largest economy with deepest capital markets, most sophisticated financial instruments – and, let me also add, the most advanced risk management tools. given the increased complexity and magnitude of the current crisis, this calls into question whether the tools available at hand to policy makers are adequate in ensuring economic stability, the essence of our mission as central bankers