, most importantly, trading from a single book. i consider that the establishment of a single stock exchange creates the opportunity for the development of a caribbean numeraire currency. certainly, if there is one book there should be one currency in which transactions are denominated. if we do nothing about it – it will be the us dollar – by default. if we take a conscious step to create a regional numeraire currency – and it could be of equivalent value to the us dollar so as to eliminate any conversion difficulty when we actually do create a single transactions currency in the region. i think also that the use of a regional credit rating agency will become increasingly important. we already have one in the caribbean information and credit rating services ( caricris ). in order to encourage surpluses in the country to be invested in deficit countries it will be important that potential investors know the value of their investment. the recently established regional rating agency will help to establish the value of corporations across the region so that an investor in barbados can more easily rely on specialists in the field to value the quality of companies and the strength of the balance sheet of companies – say – in st. lucia or dominica. a number of steps of this kind to set up institutions which facilitate regionalism are being taken both by governments, government related institutions and by the private sector. these are the kinds of tripartite initiatives which we need to ensure that the appropriate framework for the smooth functioning of the csme is property enabled. in order for the csme to function effectively, there is a need to harmonise, and i would go so far as to say, “ unify ”, the rules and guidelines governing the conduct of businesses across the region. the caricom secretariat has started with the financial sector and has framed a financial services agreement. this is a very important step as it sets out guidelines within which the sector should operate. however, we will need to do more to minimise and, preferably, eliminate the differences in our legislation, and in our criteria for establishment in the various sectors, in order to eliminate regulatory arbitrage and reduce corporate legislative shopping within the caribbean. i strongly feel that our chambers of commerce across the region must be strongly involved in the process. this means, by implication, our employers confederation as well. i believe that this is why the distinction is made between the single market and single economy. yes, we can more quickly become a single market – however, in order for us

order to avoid any significant disruptions arising from unregulated short - term capital flows. liberalisation also has implications for the independence of monetary policy. whereas, domestic economic circumstances might indicate the need to keep interest rates low, if regional rates are high, in the context of an open capital account, then there is more pressure to raise rates in order to keep money at home, even though the domestic cost situation would suggest that interest rates be kept low so as to reduce the cost of operations of businesses. on the other hand, many of the changes associated with the csme, e. g. the enhanced ability of companies to establish a commercial presence anywhere in the region, could result in increased capital flows into barbados, provided that we maintain and encourage an attractive investment climate. we have already seen this inward flow with respect to the banking system. under the csme regime, current trends in the financial sector are likely to be reinforced, in that the cross - border provision of financial services, as well as the integration of financial markets, will become even more of a reality. this should produce a number of benefits for consumers : widening the range of financial services available to consumers, lowering the cost of these services and generally promoting competition and greater efficiency in the day - to - day transactions taking place within the barbadian economy. however, full advantage can only be taken of these benefits in the context of full liberalisation. it will therefore be important to judge how far and how fast that liberalisation process can take place without creating domestic disruption and excessive loss of foreign exchange reserves. the spate of mergers and acquisitions which have taken place in recent years have been influenced by the need for corporations to benefit from economies of scale. with large corporations now dominating almost every sector in the field of finance, regulators will have to guard against any attempts by financial institutions to abuse the rights and privileges associated with the csme by engaging in anti - competitive practices. however, with consolidated supervision and policy harmonisation forming an integral part of the csme process, it is anticipated that this potential problem should be kept at bay. mergers and acquisitions have been more evident in the banking and insurance industries – it may abate but i do not think that it is over. at the level of securities trading, i expect to see continuing strong activity. hopefully, within the next year or two, we will see greater harmonisation of the stock exchanges in the region, where there are similar listing rules, similar take - over criteria and