by excess liquidity. we all know that in the past year, financial institutions have had to cope with the implementation of a new accounting standard and with the debt restructuring of barbados domestic government securities. however, the sector has proven resilient with capital remaining above statutory requirements. your foray into corporate lending provides an opportunity for you to diversify your business. at the same time, it presents a challenge, as you compete with brands well established in this area, with larger capital bases and access to mature risk management systems. your goal must be to create a niche area for products and quality of service in the financial services market that will differentiate you from your competitors. your challenge will be to attract small and medium size credits, to provide financing and where possible, advice to enable these entities to grow and flourish. your expansion occurs at a time when the barbadian financial industry is gradually evolving, with an increasing push to offer new types of financial products and services. technology is driving developments with increasing emphasis on on - line banking and digital payment solutions. i believe that these developments will enhance efficiency and productivity and therefore benefit the economy. already we can see a future in which traditional instruments such as cheques and cash will play second fiddle to technological transfers of money within the public and private sectors. these technological innovations will impact individuals, corporates, financial institutions and government, and i encourage you to align your systems to cope with the emerging trends. the adoption of new technologies is a positive development for a small economy like ours with highly concentrated markets. it creates the potential for increased competition, an expansion of the range of products and services available to the public and an improvement in the public ’ s access to affordable financial services. the central bank is therefore committed to fostering a regulatory environment that will enable existing or new firms to expand and improve the quality and range of financial products and services. in closing, let me reiterate that the opening of this branch provides an opportunity to implement new approaches and offer financial solutions that can add vigor to the existing credit market. on behalf of the central bank, i offer sincerest congratulations to ansa 2 | page financial holdings ( barbados ) ltd and the management and staff of consolidated finance company limited for the demonstration of the commitment and faith in the resilience of the barbados economy. best wishes for the future. thank you. 3 | page

in determining aggregate outcomes during crisis, as well as in specific markets and cycles. i am quite sure that there has been a distinctive step - up in the recourse to notions of expectations and sentiments by forecasters in explaining their muted or upbeat prognosis for macroeconomic variables in the period ahead. 14. andrei shleifer and co - authors have worked on formalising the insights of behavioural economics, such as representativeness heuristics as the basis for realistic expectation formations, within familiar analytical frameworks [ 5 ]. specifically, shleifer shows how representativeness thinking may cause agents to over - weight the probability of good fortune, due to selective retrieval of information from memory, inducing excessive optimism [ 6 ]. embedded in a dynamic model of credit, such drivers of expectations formation can amplify pro - cyclical booms and busts in the issuance of risky credit, credit spreads as well as in investment spending. 15. separately, on the empirical side, we have also seen much [UNK] in the literature to better measure expectations. the point of departure is that survey expectations are not “ noise ”. they are a useful tool insofar as they reflect what market participants and other agents believe and act on. our latest macroeconomic review featured an article by professor bernard yeung and sumit agarwal of the nus business school, reviewing the latest research work on surveying and characterising consumer expectations [ 7 ]. attempts to make inferences on the formation of expectations and validate any causal impact of expectations on economic behaviour are o en thwarted by endogeneity or imprecise estimates. however, large scale randomised control experiments in conjunction with carefully designed surveys on consumers are now routinely used as they allow researchers to directly control the formation of expectations and to reliably identify causal [UNK] running from expectations to behavioural responses. 16. the article summarises the results of a notable experiment done on singapore consumers, which show that consumers have biased inflation expectations. specifically, the study shows that consumers do not adjust for the [UNK] of changes in quality on prices, thereby overstating the true rate of inflation. this results in a systemic upward bias in the public's inflation expectations if a society experiences widespread income growth, which at the same time induces the upgrading of the quality of purchased goods. in singapore, the department of statistics has adopted hedonic regression techniques in the compilation of the cpi for used cars for example, in order to achieve a