to small institutions, where the ultimate aim should not be their survival in order to avoid a serious interruption in the flow of credit, but rather their removal as soon as possible at as little cost as possible. indeed, some of the biggest developed economies witnessed, at the onset of the financial crisis, how several of their leading banks were collapsing. this was because, in addition to bis central bankers ’ speeches the sudden downturn in the value of their assets, they saw the short - term funding channels on which they relied so heavily disappear. given this scenario, the logical and no doubt inevitable reaction was to swiftly inject huge amounts of public money. yet in spain ’ s case, there was overall excess capacity in the sector and the problems were at a group of small or medium - sized institutions with a reasonably long - term financing structure. all told, the advisability of earmarking public funds to these institutions immediately was much less evident. on one hand, it is not surprising that ailing institutions should apply for public aid, if possible without conditions. but the mission of the authorities is to look out for the general interest, setting conditions for this aid that ensure the adjustment and restructuring of the sector and the creation of new, stronger and better managed institutions, of a sufficient size to gain access to wholesale funding, thus enabling them to channel funds appropriately to the economy as a whole. conversely, it is not surprising that those institutions in a better position should call for the swift winding up of the institutions facing problems. yet as one of the articles in the book being presented today clearly explains, bank - resolution processes can entail enormous costs for taxpayers, which must be set against the unquestionable benefits of shortening restructuring time. moreover, insofar as these costs may affect sovereign risk, the cure might prove worse than the illness. but let us talk about the present, about what we should do now. evidently, not only have we not exited the crisis, but the information reaching us shows that the crisis may worsen in the coming months. exit will depend on what the reaction is on the domestic, european and global fronts. at present, the key to our future lies in the capacity of the european institutions, the european council, the eurogroup and the ecb, and the national governments, to act in unison, each in its own area of responsibility, with a single, shared objective : to halt the dangerous current market dynamic. in the absence of joint action, any

sunil mendis : a brief look at financial information technology keynote address by mr sunil mendis, governor of the central bank of sri lanka, for the financial information systems seminar, colombo, 8 september 2004. * * * his excellency akio suda, the ambassador for japan in sri lanka, mr yoshihisa onishi, executive director, fisc, other officers from the fisc in japan, ladies and gentlemen, the central bank of sri lanka is happy to co - sponsor this programme together with the fisc of japan ( center for financial industry information systems ), in view of the importance of financial information technology in the financial services industry. sri lanka is no exception to continuous changes in the technology used by its financial services industry. in a market driven financial system, for information to be effective, there should be two vital ingredients, that is system integrity and timeliness - both of which are crucial. the more dependable your information systems are, the more efficient and competitive banks can be as a player in the financial services industry. that is why we see banks investing heavily in it. globally too, with the interdependence of markets their integration is facilitated through information systems which link these markets which make the world a very small place indeed on a pc monitor where the whole world is virtually at your doorstep. the fisc, therefore, has contributed significantly, over the last 20 years, to making information systems more efficient and dependable through their research activities and technical co - operation programmes which have been extended to asian countries such as sri lanka. of particular interest to banks would be the security guidelines on computer systems and audit guidelines for information systems of financial institutions, which they have issued. some of these can be used as guidelines by our banking industry. government and the people of japan have contributed immensely to the development of this country for many decades in the past in different fields and their support in sharing their knowledge on financial information system with the sri lankan financial sector is greatly appreciated. in this connection i wish to thank the fisc who has devoted so much of its time and effort to bring in expertise in this area to market participants in sri lankaa€™s financial system. this would also provide a good forum for our banks to exchange ideas on specific security features adopted by the fisc. i have no doubt that this seminar will provide an excellent opportunity for useful interaction amongst participants, and i would like to convey my best wishes.