. the sector plays a vital role in providing job opportunities at the tertiary level, where barbados has a growing pool of talent. barbados has outstanding competitive advantages in the provision of international business and financial services. some are the gift of nature, like our climate, our beaches, the ocean around us. others are an inheritance, like our native tongue, our diaspora, our democratic tradition, our infrastructure. and others, like health and educational facilities, are the fruit of barbados ’ remarkable record of economic development in the post second world war period. these things together make barbados an attractive place to live and work. however, these are especially challenging times for the ibfs industry because of the duration of the international recession, and the crusading temper of international financial reform and tax reform in the us and europe. in order to rise to the challenge, we need to add to our competitive strengths in several dimensions, by addressing new markets, developing new products and refreshing old products, and by increasing the level of efficiency in the delivery of support services. furthermore, we need to develop additional expertise, which is why we are here today. we need a richer pool of talent from which prospective investors in our ibfs sector may draw, in the fields of law and finance. a few of your colleagues have pioneered in the provision of legal services in our international business centre, and they are with us today, to share some bis central bankers ’ speeches of their expertise. as we go forward, and to the extent that our strategies for the ibfs sector are successful, we will face a burgeoning demand for legal and financial services. we are a small country, and a tiny slice of the new markets that are the targets of our diversified marketing strategy will be sufficient to exhaust all the available expertise, and much of the potential. we at central bank are therefore enthusiastic about this early effort to widen the base of available legal expertise with respect to the provision of international business and financial services. we confidently expect that this will be the first in an intensified series of activities to deepen and broaden the supply of these and other skills needed by our ibfs providers. in addition, as demand increases and opportunities open up, i know that increasing numbers of you will wish to form your own networks abroad, so that you can complement our efforts here with what you may glean from other sources of expertise. let us collectively see to it that a massive mahogany grows upward and outward from the small pod that we plant here today. the

billion ( figure 4 ). for the two - year period of 2009 and 2010, this means that, altogether, there were write - downs of some €60 billion. in the 2009 financial stability review, we estimated a figure of between €50 billion and €75 billion. the actual write - downs are therefore in the lower half of the expected range. the stability review also contains a stress test on the profitability of german banks in interest rate business and commission and fee business ( figure 5 ). the relevant risk scenario assumes a marked flattening of the yield curve ( decline of 55 basis points in the spread between the three - month interest rate and the yield in ten - year bunds ) and a severe economic slump ( 4 % decline in gdp ). in the current economic situation, this is undoubtedly a very sceptical assumption. operating income ( excluding the trading result ) shows a distinct fall in this scenario : net interest income for the german banking system as a whole ( measured by total assets ) will go down by almost 8 % ; cyclically driven commission and fee income will fall by 10 %. added to this are large write - downs in the event the assumed recession materialises. according to our estimates, these would surge to around €35 billion again ; in other words, they would be €9 billion higher than the average of the past five years. iv. monitoring systemic risk central banks, including the bundesbank, are facing new challenges. they have to identify systemic risks at an early stage, which places high demands on analytical skills. any systemic risks that are identified have to be rigorously contained. the refinements of the international regulatory framework that have already been put in place represent a gain for financial stability. the course has been set for an improvement in banks ’ capitalisation and liquidity. these measures will pay off in the long run and significantly enhance the stability of the financial system. i do not share the often - voiced fears in this connection about an excessive burden being placed on the banking sector. nevertheless, there remains much to be done. this mainly has to do with the treatment of systemically important financial institutions and the financial system ’ s tendency towards ( pro ) cyclical behaviour. we, too, have to keep a closer eye on the limitations of the areas covered by regulation. after all, stricter regulation is of little use if activities are transferred to unregulated sectors and become concentrated there. for that reason, we have to throw a