innovation seemed limitless and regulators were left behind in the process. by the first half of 2007, financial market activity had expanded at a tremendous pace. however, dependence on capital markets and on sustained market liquidity also increased, as banks and other intermediaries placed greater reliance on their ability to “ originate and distribute ” loans and other financial products. they also depended on the market to manage their risk positions dynamically. the coincidence of greater levels of deregulation and integration of capital markets implied that if a major problem arose it was more likely to spread quickly across borders. this environment encouraged an increase in risk - taking as many players “ hunted for yield. interestingly, the composition of investors also changed. measuring risk where credit can be sliced and diced the widespread use of structured credits effectively lowered the compensation for bearing credit risk and market risk to historically low levels. it is during this time that a market for bearing risk through complex structures of credit derivatives flourished. there were a few warning signals particularly about hedge funds, but not many warnings about securitisation. regulators were caught napping and the rating agencies did not spot the weaknesses. there are two aspects to this problem, one is the absence of oversight bodies which were monitoring and more importantly, which had authority to forestall this problem and the other was the absence of rules or processes which would help to prevent its occurrence. there was also clearly a need for internal corporate ground rules at the operational level. however, securitization is here to stay as it is a critical factor in achieving financial flexibility in a world of global flows. however, it is important that credit originators bear greater responsibility for the credit worthiness of the credits they originate. because of the difficulty of tracking risks in securitised loans which have been leveraged several times, loan originators need to be required to take more responsibility and to suffer some penalty for failure of the loans they originate. a solution to this problem will require greater study by derivative experts, but it is important that is addressed. concentration and risk management developing guidelines for risk management and requiring compliance to them are a core remedy for this situation and adequate internal risk management measures and processes at the level of the firm are very important. portfolio concentration seems also to be an important area which calls for attention. sectoral concentration and instrument concentration are both risk areas for which guidelines need to be developed. regulatory slips in addition to national oversight level, something went wrong also with global regulatory and oversight systems.

effective, sustainable, and grounded in evidence. the power of evidence - based policymaking lies in its ability to improve the economic welfare of all. by analysing data on unemployment, poverty, and general 1 / 2 bis - central bankers'speeches economic trends, we can prescribe policies that promote inclusive growth and drive real change. as former un secretary - general kofi annan once said, " knowledge is power. information is liberating. education is the premise of progress, in every society, in every family. " our research is the foundation of this progress. 2. addressing structural challenges the caribbean's low productivity and competitiveness are exacerbated by high debt and limited fiscal space. research plays a pivotal role in identifying these structural barriers and proposing targeted solutions. for instance, we know from global case studies that economic growth, job creation, and poverty reduction are interlinked. the success stories of countries like vietnam and indonesia demonstrate that by focusing on employment strategies, nations can experience significant poverty alleviation. our research must emphasise the importance of human capital development to drive productivity and innovation. 3. enhancing economic resilience : we are all aware of how vulnerable the caribbean is to external shocks. however, by diversifying our economies and strengthening our institutional frameworks, we can build resilience. understanding the effects of phenomena like bank de - risking or global supply chain disruptions is essential to crafting policies that ensure stability and continued growth. yet, we are not without challenges. limited data access, under - resourced institutions, and the ever - present brain drain hinder the growth of our region. but these challenges only strengthen our resolve. as nelson mandela wisely said, " it always seems impossible until it's done. " let us view these obstacles not as insurmountable barriers but as opportunities to create innovative solutions through the research we undertake. in closing, caribbean economic research is not just vital - it is the antidote to our challenges. through our research, we can solve our own unique problems and unlock sustainable growth, reduce inequality, and improve the quality of life for all our citizens. investing in research is not merely for academic exercise ; it is a key component to unlocking a brighter future for all of us. together, through our collective efforts, we will chart a path to resilient, innovative, and thriving economies that strengthen our macroeconomic management to withstand the era of many crises. it is with the greatest pleasure