well behind financial innovation. the global response the global financial reforms launched by g - 20 leaders are designed to address the three weaknesses i have just discussed. first, to reduce the incidence and severity of financial crises, financial institutions will be required to have more ample cushions of capital and liquidity. second, steps will be taken to reduce the risk that financial markets become channels of contagion. and third, mechanisms to deal with the too - big - to - fail problem will be made more robust. i will briefly discuss each of these elements. the centrepiece of the agenda for global financial reform is the new basel iii rules on capital and liquidity. these rules substantially increase the loss - bearing capital that financial institutions must hold, combined with required liquidity ratios and a limit on leverage. in addition, a countercyclical buffer will be established so that capital is built up in good times, which can subsequently be available to absorb losses. 1 on financial markets, a key step is to strengthen market infrastructure to reduce systemic risk. the g - 20 leaders agreed to require clearing and settlement of over - the - counter derivatives through central counterparties, and to increase transparency in those markets – which proved to be a channel of financial contagion during the crisis. a central counterparty is also being established in canada for clearing repurchase agreements ( repos ), a key form of short - term financing. a related issue is market - based financing, including securitized lending. work has begun under the auspices of the financial stability board to define the sector, to develop the data and methodology to systematically monitor it, and to develop policy options. 2 to address the too - big - to - fail problem of systemically important financial institutions, work is under way to ensure that they are appropriately supervised and adequately capitalized to absorb losses, and to establish a framework for resolution in the event that they do fail. so this, in a nutshell, is what is being done to address the weaknesses underlying the 2008 crisis, with a view to creating a more resilient global financial system. i will now go on to discuss a new pattern of risks that has emerged since the recession. risks in a two - speed global recovery as i have already mentioned, the current global recovery is operating at two speeds, with robust growth in emerging - market economies and anaemic growth in the advanced the bank of canada ’ s research report on the costs and benefits of the new rules can be found at

r basant roi : corporate governance guidelines and monetary policy stance in mauritius address by mr r basant roi, governor of the bank of mauritius, at the opening of the goodlands branch of the indian ocean international bank ltd, goodlands, 20 august 2004. * * * hon. deputy prime minister and minister of finance chairman of the board of directors of the ioib chief executive and staff of the ioib ladies and gentlemen good afternoon i am pleased to be here in your midst for the opening of the goodlands branch of the indian ocean international bank ltd. i understand that the indian ocean international bank has for quite sometime been implementing a plan for strengthening its financial standing and is also in the process of enhancing its corporate image. the bank has so far made a good measure of progress in this endeavour. i would like to urge its board of directors to maintain the speed of progress with the same zeal and vigour to the finish. poor corporate governance has been the major cause for the weakness of banks and bank failures in mauritius. to the board of directors of the indian ocean international bank and to the boards of directors of all other banks operating in mauritius, i would like to say that adherence to good corporate governance principles is indisputably the key to the maintenance of the sound and solid financial standing of financial institutions. a bank, however small, with good corporate culture is far stronger than any big bank with poor corporate governance principles. in the past few years the bank of mauritius has issued to banks a comprehensive set of guidelines, including corporate governance principles that they are required to adhere to. while virtually no banker disputes the necessity to impose those principles and other guidelines, many in the industry view them as cumbersome and too demanding. it is true that relative to way banking business used to be conducted until very recently in mauritius, the regulatory requirements are indeed demanding. we cannot, however, overlook the fundamentally important fact that regulatory requirements do serve the best interests of depositors. and the bank of mauritius, as regulator of the industry, is here to protect the interests of depositors. regulations are not designed to shape good behaviour of bankers. they aim at establishing discipline in the conduct of banking business and promoting corporate habits that are not only fair but also transparent to market participants. in this process, regulations do also help create conditions conducive to the sound development of financial markets. often we come across rogue shareholders and rogue board members. companies commonly face a typical problem ; it ’ s the