dimensions. the breath of responsibilities of the regulator are now also being revamped, particularly in the us, as is the question of how much should be left to the market and how much should be directly regulated. the age of deregulation may well be about to witness some fundamental changes and reversals. governance good governance aids regulation. regulators are therefore calling on institutions to institute voluntary governance practices to deal, for example, with excessive risk taking, rather than opt for a system of imposed over - regulation. adequate oversight by boards is important, as is adherence to codes of ethics. importance of collaboration what has become very clear, and we have seen it even in the caribbean, is that there is now significantly more emphasis being placed on collaboration among regulators, and on reducing regulatory arbitrage – that is, the ability of entities to cherry pick where they do business, so avoiding the stricter type regulatory domiciles, because of differences in regulation. this is particularly important in single economic zones like the caribbean, and on a larger scale, the eu. derivative trading while the caribbean has not been too heavily involved in derivative trading, the regulation of derivatives has attracted a lot of attention, since many of the problems in the credit markets were attributable to the ability of financial firms to originate poor credits and redistribute them to others, thus leaving the burden of poor credits which they had originated on the books of others. it is important that solutions are found to this issue. branch / subsidiary operations the branch subsidiary responsibility and where it lies has also surfaced in many jurisdictions. because an entity is setup by way of subsidiary rather than a branch does that give the parent an escape route? or should the parent shoulder its responsibility even though the entity is set up as a subsidiary? adequacy of capital another issue of importance is the question of the adequacy of capital. this has become an important matter in the post meltdown period. many jurisdictions have taken steps to increase capital adequacy. even before the global crisis barbados had taken such steps. however, the adequacy of capital is being increasingly critical. will capital ever be a fail - safe requirement? if it were, capital levels would have to be so high as to stymie the development of financial institutions. what therefore is the balance which has to be struck? and what are the accompanying requirements which must support capital requirements? these are important areas to be considered. too big to fail

delisle worrell : the strength of barbadian institutions and the resolve of barbadians will see us through the crisis op - ed article by dr delisle worrell, governor of the central bank of barbados, 15 august 2013. * * * barbadians have every reason to be confident that we can cure the foreign exchange imbalance which has emerged in the last three months, and revive the growth of our economy. first, we have the highest standard of living in the caribbean, and we have earned it by transforming the economy and investing in infrastructure and human resources, over many decades. figure 1 compares the human development index ( hdi ) for barbados with the rest of the caribbean. the hdi is the best indicator of the quality of life available for countries worldwide. second, barbados has strong institutions for decision making : our social partnership is the envy of countries worldwide ; our economic information systems are the equal of many industrial countries ; our media are knowledgeable ; and we have a strong mechanism for putting policy into effect. thirdly, we have preserved the value of our dollar, protecting the value of people ’ s savings, and providing more predictable returns for investors. fourthly, we have reserves which are more than sufficient to ride out the storm, as may be seen in figure 2. with these resources we may confidently address the challenges, which are twofold. the first is to balance foreign exchange inflows and outflows. following the june 27th economic consultation, government is in discussion with the social partners on measures that will be introduced to reduce the fiscal deficit. the required adjustment is considerable, about 4. 5 % of gdp, but not sufficient to cause major social disruption, as may be seen in figure 3. the adjustment will protect the value of our currency, which is vital to barbados ’ economic prosperity. figure 4 shows how the caribbean countries which have devalued have fared, compared with those that have maintained an unchanged value of their currency in terms of the us dollar. economic growth is the second challenge. the social partners continue to pursue actions to revive the economy. investment amounting to $ 2. 3 billion is in prospect for the foreign exchange sectors, and government contemplates $ 1 billion of infrastructure and other projects. initiatives are underway to improve access to finance by small and medium enterprises. labour is charged with an urgent need to improve productivity and quality of service in every area of activity, so that barbados becomes a byword for