a forward looking requirement. most banks currently meet this ratio. for standard assets, in alignment with the basel proposals for forward looking provisioning, more work needs to be done based on sectoral trends and measurements of estimated loss based on something like the spanish dynamic provisioning model. • in the case of capital for trading book and counterparty exposures, while some enhancements have been made for forex derivatives, more work will be required for counterparty exposures and other derivatives. nevertheless, looking at the interest rate risk for the entire balance sheet rather than the trading book alone, duration gap analysis could be a useful tool for managing interest rate risk. 7. let me next turn to the areas where banks need to be sensitive to risk : • while overall, credit growth in the banking sector has been slower in the current year, certain sectors like real estate, infrastructure and nbfcs have seen higher rates of growth. credit to commercial real estate ( cre ) has fallen in the half year ended september 2009 evidencing higher risk perception. however credit to nbfcs and infrastructure continues to be high. while the country needs infrastructure financing of significant magnitude, banks that essentially mobilise short term resources do face risk on account of alm, large size exposures and some risks beyond their control such as implementation hurdles. the emergence of long term investors such as pension and insurance funds, development of corporate bond market, and single name cds may help in de - risking to a certain extent banks exposures to infrastructure. • a phenomenon that rbi has brought to attention of banks recently is the large investments by banks into debt oriented mutual funds. mfs have invested large amounts in bank cds. banks that have a significant part of their liabilities in form of cds have to be sensitive to the rollover risk. equally, banks that have large investments in mfs have to be sensitive to the liquidity risk in the event of the need for sudden redemption by large investors at the same time. this distortion – whereby mfs are apparently acting as intermediaries in what should otherwise have been intermediated in the interbank market – is something that needs to be addressed. besides there are concerns about the direction of flow of resources through mf intermediation. • in the case of lending to nbfcs engaged in micro finance treated as priority sector lending by banks, there is a risk that multiple lending and high interest rates could lead to deterioration in asset quality. as originator of these loans no

of asset classes to suit market conditions, and conduct regular risk assessments specific to macro, geopolitical, and liquidity risks can help you stay ahead of potential issues. government has set a target of 5 percent economic growth rate over the mediumterm ( 2023 - 2027 ). to achieve this, we need the private sector to raise investment from the current eight percent of gdp ( approx. $ 975 million ) to 15 percent ( an annual average of $ 2 billion ). barbados is ripe with investment opportunities and its economic outlook is strong. given our growth objective over to medium - to long - term, we have identified a number of investments which you can pursue. ( i. ) investment in climate resilient infrastructure and in the green transition, ( ii. ) low and middle - income housing / real estate, ( iii. ) new tourism projects, ( iv. ) transportation, ( v. ) agro - processing, ( vi. ) skills, training and education, ( vii. ) digitisation, and ( viii. ) ai & robotics. your investment in these types of initiatives can help barbados navigate these uncertain times and propel our economy to new heights, something from which we will all benefit. and how could i end without highlighting the potential of investing in government securities, in particular boss + bonds? this is an excellent investment for you as individual investors and definitely for the institutions which you represent. i would therefore urge you to consider investing in these bonds. this year, we have issued a $ 200 million tranche and $ 125. 8 million is still available for you to purchase. i'll be looking out for your applications very soon, good morning and thank you for your attention. any questions? 4 / 4 bis - central bankers'speeches