relative development of our business and financial markets, local internet penetration and international connectivity. the quality of life in barbados is high, attested to by the human development report, published by the united nations development programme ( undp ). in recent reports barbados is credited with high human development, an indication that in terms of what our salaries will buy, as well as educational and health status, barbadians live as well as people do in some advanced countries. we have all but eliminated dilapidation in housing, access to electricity, water and sanitation is universal, and homelessness has been reduced to a level that many rich countries would envy. we have our very wealthy, and our poor people, but on the whole we are a remarkably egalitarian society. our economic performance the barbados economy runs on foreign exchange, as i have often said. we live quite well, by international standards, by selling the goods and services we produce at competitive prices for bis central bankers ’ speeches foreign currency, and using that foreign currency to import everything we need for our modern lifestyles. our main focus is therefore always on the activities that earn us foreign exchange : tourism and related activities, international business and financial services, and rum, chemicals and a few other manufactured goods. there is one sector where we have the potential to increase output without the use of foreign exchange, and it is in the energy sector. every day in barbados we produce far more energy than we could possibly use, but almost all of it is completely wasted, because it is in the form of heat generated on our roofs and other surfaces that absorb and reflect the sun ’ s rays. we currently harvest a small amount to heat water. however, affordable photovoltaic systems now provide an opportunity to businesses and middle class households to generate all their electricity needs. of course, we would need a means of supplying electricity at night. it has been shown that with a combination of solar and wind energy, plus biofuels and storage, barbados could become self - sufficient in electricity generation. it is an opportunity we cannot afford to pass up. barbados ’ tourism is rising to the challenges of the 21st century. the barbados brand is highly regarded, and developments in the sector have largely enhanced the quality and appeal of the barbadian tourism product. the visitor experience has been enhanced by top quality sports, dining, shopping, music, culture and heritage. our visitors are in search of authentic experiences, and we continue to enrich our offerings in ways that are

to a more liquid market where money moves more quickly. in times where liquidity is needed rapidly, thinly securitized markets have their downsides, though they tend to be more safe and less volatile. in such cases the strength of the balance sheet is more important than changes in the market value of deposit institutions. all the balance sheets of financial institutions that i have seen show solvent institutions so though this is not the only relevant factor, we start with an advantage. risk management risk - taking is a necessary element in conducting business, and effective risk management systems, together with good governance strong regulation and supervision all serve to mitigate risk exposure. supervisors instil market discipline by employing strong licensing criteria that ensure the fitness and propriety of directors and executive officers. we should not use the opportunity of these hiccups to remove ourselves from risk - taking. we need to take well considered risk. it is part of the growth process. enforceable guidelines ( e. g. corporate governance, operational risk management and capital adequacy ) and regulations must be supported by effective ongoing monitoring of risk exposures and monitoring for compliance with legal requirements. sometimes legislation is necessary to ensure that supervisors have the needed powers of enforcement to intervene at various stages where infractions may be detected so as to avoid escalation of the problem. both the central bank of barbados and the supervisor of insurance possess legal powers to conduct inspections of their licensees. in some cases the strength of the oversight in the non - bank sector needs to be enhanced as was mentioned in the last financial sector assessment programme report. capital controls in the barbados situation, capital controls have served us well. they serve to control and monitor cross - border financial transactions. further, entities that are licensed under the financial institutions act, cap 324 are additionally subject to credit exposure restrictions relative to capital – that is levels on lending to a single person or group. where these are below acceptable levels, licensees are given specified time periods to have them corrected. this is a key credit risk control and is monitored on a quarterly basis using prudential returns submitted by all central bank licensees. institutions are not always perfect, breaches can be corrected and the earlier the better, but it must be done in an orderly fashion. a disorderly correction is to be avoided. consolidated supervision consolidated supervision of financial groups necessitates collaboration at different levels. memoranda of understanding among all domestic regulatory agencies are key in facilitating information exchange and collaboration. there