the public opinion. the market disclosure rules foreseen by the new legislative framework will really allow everybody interested to have access to the financial bis central bankers ’ speeches position of an insurer with an unprecedented level of detail. the inherent sophistication and complexity of solvency ii, however, raise issues that need to be addressed. it is essential that such informative treasure be of high quality, that could be easily understood and used. a possible complication stems, at least in our country, from the coexistence of the solvency ii informative approach with financial statements based on accounting standards not matching the former. it may be a source of confusion and misunderstandings, possibly endangering the reputation of both supervisors and companies. it will be interesting to exchange views on that today. let me conclude, ladies and gentlemen, with a word of caution. solvency ii is just a regulatory framework. it designs the urban map, it imposes one - way streets and speed limits, it deploys traffic lights and traffic officers. all this infrastructure has just been changed, and today we are going to discuss how to ease the transition towards the new regime. but the traffic itself, the thousands of cars and drivers in a modern city, well, that is the market. and the insurance market, all over the world, is now facing a bigger challenge than the one posed by a change in the rules of the game, though radical. the challenge is twofold. a structural one : technological innovation. the other one is apparently of a conjunctural nature, but it is actually persisting almost like a structural feature : that is the environment of low and volatile financial returns in which we have been living for years now. i said low, i could have said negative, in the short - term segment of financial markets. how fast will the new technologies disrupt the traditional way of conducting the insurance business? how long will monetary policies keep interest rates at the present unprecedented levels, or even lower? nobody knows, and every opinion is legitimate. but the whole business is rocked by these developments. understanding the trends and the challenges behind the current state of affairs in the insurance market should be a common endeavor for regulators / supervisors and the industry. for the time being, we have to work together in order to make the implementation of solvency ii as smooth and effective as possible, also for the purpose of strengthening the insurance sector and make it capable of resisting the present headwinds and catch the

. it is expected that the stance of monetary policy will continue to remain accommodative while maintaining price stability. in respect of public finances, contingent fiscal pressures on the government are relatively benign as outstanding guarantees for state owned enterprises are low. however, public finances would be impacted by expenditure cutbacks on account of implementation capacity constraints, notwithstanding higher external and non - bank financing. the estimated budget deficit for 2009 – 10 is placed at 4. 5 percent of gdp as against the projected level of 5. 0 percent. efficient and expeditious implementation of development programme projects can create conditions for crowding in private sector investments and together with monetary policy, can support broad - based, inclusive and environmentally sustainable growth. bhutan 33. bhutan ’ s economic performance has been strong in the recent past anchored in political stability and prudent economic policies. the country is well on its way to achieving it millennium development goals with the 10th five year plan ( 2008 – 13 ) outlining a wideranging development agenda. the impact of the financial crisis very limited and confined to the tourism sector. growth is expected to be close to 7 per cent throughout the medium term supported by the punatsangchhu - i and mangdechhu hydropower projects. average inflation was lower in 2009, at about 4 percent but following inflation developments in india, inflation has risen in the first quarter of 2010. government revenue and expenditure both rose strongly in 2008 / 09, with revenue rising to 39 percent of gdp from 33 percent, and expenditure to 41 percent from 33 per cent. in the external sector, convertible currency reserves remain high, while rupee reserves have increased sharply in recent months. in the financial sector, credit growth is still strong but slowing somewhat in the private sector. the focus of the financial sector liberalisation policy is on increasing competition and efficiency in the sector and three new private sector banks have been licensed and external commercial borrowing was also permitted for selected private sector entities. concluding observations concerted and decisive actions by both advanced and emerging and developing countries helped the world to deal with an unprecedented financial and economic crisis. our response has strengthened international cooperation and instilled confidence that together we can secure the financial stability of the world and achieve sustainable economic growth. towards this objective, a number of significant and concrete steps have been taken, an important one being the substantial strengthening of the fund, including refinements in its surveillance, the expansion of resources and the improvement of lending facilities. looking ahead, the fund will