positive trends. however, currently almost every central banker in this globalised world keeps wondering whether the night ahead will continue the dream run and if so, when will it run out of steam. the concerns of central bankers today arise out of what has been described as stable disequilibrium with every day adding to potential disequilibrium while continuing to be stable. the perceived risks arise mainly out of global imbalances and outlook for oil prices, particularly in the light of emerging geo - political situation. most market participants seem to sense these risks but this sentiment does not appear to be reflected in the pricing of risks. risks do not disappear but they get transferred to another part of the system. the macro policies in emerging markets in particular have to factor in these risks while continuously balancing financial sector reform and stability considerations. more important, for the regulators, monitoring where the risk lies has become very difficult due to emergence of large conglomerates, sophisticated market instruments such as derivatives and presence of players like hedge funds. the good news is that there is international cooperation among central bankers to mitigate the impact of such risks. the actuaries can certainly help the process of analysing the risks in insurance sectors that do affect a large segment of population that in fact seeks to minimize such risks through insurance. let me conclude by thanking the organisers for provoking me to think aloud and share my thoughts on a subject of common interest to all of us assembled here. i wish the conference fruitful deliberations, well balanced by pleasant stay and memories.

are some issues relating to competition in the financial sector and monetary policy, which are worth flagging. first, both efficient markets and successful use of market - based policy instruments, require a strong legal framework and effective implementation. second, competition in the financial sector appears to be a little more complicated than in the nonfinancial sector. for instance, consensus is still lacking on the separation of commercial and investment banking. further, there are differences on issues of commercial affiliations of otherwise ‘ fit and proper ’ owners of banks. this issue was raised in the discussion today and professor monti also felt that it calls for deeper reflection. major issue here is the potential for conflict of interest, in particular, the possible perception of such a conflict of interest in the realm of public opinion in respect of banks, which are highly leveraged with acceptance of uncollaterallised deposits. moreover, banks continue to be viewed as enjoying a special status in the financial sector, especially in the developing economies – which could be construed as unfair competition between banks and non - banks. it is also possible that banks have regulatory burdens disproportionate to their special nature and relative to non - banking intermediaries. third, financial sector competition has two dimensions, namely, amongst the intermediaries and in terms of price discovery in financial markets. here i am deliberately not referring to the fundamental issue raised in the discussions on the address by prof. jacob frenkel on central banks ’ monopoly over domestic money supply, and supply of foreign currency, in some ways. that has been responded to by professor monti and chairman roth has also touched on this aspect in his remarks. fourth, by its very nature or as a matter of current practice in regard to most of the goods and services, the degree of financial sector competition varies across countries. in other words, variability in the degree of competition in the financial sector across economies is perhaps more than those in the non - financial sector. fifth, the increased competition in the financial sector will enhance efficiency and stability, if there is an acceptable minimal degree of competitive efficiency in the product markets and, to some extent, factor markets, supported by some comfort of sound institutions and practices. the markets are mutually reinforcing, but, ideally, the competitive conditions in all the markets need to be broadly in sync and avoid serious mis - alignments with each other. sixth, some of the multi - national banks have assets exceeding the gross domestic product of many large