jaime caruana : implementation of basel ii and other key issues relating to banking supervision in latin america and the caribbean opening speech by mr jaime caruana, governor of the bank of spain and chairman of the basel committee on banking supervision, at the joint meeting of the fsi and asba, miami, 25 april 2006. * * * introduction first of all, i would like to thank rich spillenkothen and josef tosovsky for inviting me to participate in this joint meeting of the fsi and asba, during which we will be able to discuss various key issues for banking supervision in latin america and the caribbean over the next few years. two things are evident from the agenda. the first is that there are a large number of key topics to discuss today and tomorrow, which demonstrates the importance and timeliness of this meeting, which i am sure will be fruitful for all concerned. the second is that basel ii continues to be a central and priority topic for supervisors and the banking industry alike, as evidenced by the presence here today of major banking representatives, whom i would also like to thank for attending. it is well known that the committee has devoted a large part of its efforts over the past few years to first developing and then implementing the revised capital framework. today, we have the opportunity to debate different aspects relating to its implementation and application. once the phase of theoretical debate and standards drafting had been completed, the committee ’ s activities, in particular through its accord implementation group ( aig ), focused on implementing the framework. the time has therefore come to confront this practical reality, with all its difficulties and problems, through a dialogue with the industry and the global supervisory community. this is a major task, given that the aim is to strengthen banking systems and the international financial system, rendering them more robust, more stable, and thus more capable of contributing effectively to the growth and stability of our economies. despite the importance of basel ii, the proposed agenda also shows us that this is not the only topic currently of interest to the supervisory community. tomorrow, we will be discussing one of the committee ’ s key projects, which, i am convinced, affects all these supervisors gathered here today. i am referring to the basel core principles. with these introductory words, i would like to provide a general overview of the committee ’ s work in these areas. first, i will focus on the revision of the basel core principles, before moving on to talk about the implementation of the revised framework

be very long. the internet revolution of the 1990s was based on scientific investments made in the 1970s and 1980s. and today ’ s widespread commercialization of biotechnology was based, in part, on key research findings developed in the 1950s. thus, governments that choose to provide support for r & d are likely to get better results if that support is stable, avoiding a pattern of feast or famine. 19 government support for r & d presumes sufficient national capacity to engage in effective research at the desired scale. that capacity, in turn, depends importantly on the supply of qualified scientists, engineers, and other technical workers. although the system of higher education in the united states remains among the finest in the world, numerous concerns have been raised about this country ’ s ability to ensure adequate supplies of highly skilled workers. for example, some observers have suggested that bottlenecks in the system limit the number of students receiving undergraduate degrees in science and engineering : surveys of student intentions in the united states consistently show that the number of students who seek to major in science and engineering exceeds the number accommodated by a wide margin, and waitlists to enroll in technical courses have trended up relative to those in other fields, as has the time required to graduate with a science and engineering degree. 20 moreover, although the relative wages of science and engineering graduates have increased significantly over the past few decades, the share of undergraduate degrees awarded in science and engineering has been roughly stable. 21 at the same time, critics of see lane ( 2009 ). for early work in this area, see nelson ( 1959, 1961 ). see greenstein ( 2007 ), huang and murray ( 2010 ), and freeman and van reenen ( 2009 ). see freeman and van reenen ( 2009 ). for a discussion of why these bottlenecks persist, see romer ( 2000 ) and noll ( 2003 ). see national science board ( 2010 ), tables 2 – 6 and 2 – 12. bis central bankers ’ speeches k – 12 education in the united states have long argued that not enough is being done to encourage and support student interest in science and mathematics. taken together, these trends suggest that more could be done to increase the number of u. s. students entering scientific and engineering professions. at least when viewed from the perspective of a single nation, immigration is another path for increasing the supply of highly skilled scientists and researchers. the technological leadership of the united states was and continues to be built in substantial part on the