that will be within the financial sector, as the run up to the latest crisis illustrates. on other occasions, it could be part of the real economy. history points to commercial real estate as an obvious example. property - related borrowing booms have often driven financial stress. in those circumstances, simply increasing the headline capital requirement might prompt banks to cut lending to sectors of the economy that were not overly exuberant while maintaining lending into the booming sector that seemed to offer wonderful returns. that would be perverse. better, sometimes, to try to address a bubble at its source. this could be unpopular, but such is the job of taking away the punchbowl. we will explain our decisions. i cannot emphasise enough that the fpc will not indulge in attempts to micromanage the banking system or the allocation of credit. nor will we be excessively activist, trying to fine - tune credit policy. this is about stability, which is an absolute precondition for steady improvements in economic activity and employment. the goal is to make the financial system resilient, to contain destructive “ busts ”, and to do so without impairing the contribution that the financial sector makes to the economy ’ s medium - term growth. can the fpc help right now? the benefits of the new regime for stability will take time to come through. that might leave you asking what the fpc could do to help right now. indeed, with credit conditions so tight, it has been asked whether the fpc should be easing regulatory constraints on banks. the aim would be to encourage them to loosen lending conditions, helping recovery. and, it is suggested, that would be consistent with the fpc ’ s remit because it could reduce threats to stability from the risk of borrowers defaulting. at its september 2011 meeting, the fpc concluded that such a step would in fact be counterproductive – endangering stability and jeopardising recovery. given the precarious starting position of uk banks when the crisis broke, their capital adequacy is still being rebuilt. and banks are still operating in an extraordinarily risky international environment. it would not be sensible to relax capital requirements when the unusual hazards persist. today, gradually strengthening capital adequacy, and so building resilience, is best not only for stability but also for sustaining the recovery through what might lie ahead. monetary policy with government needing to set fiscal policy in order to repair

region ’ s economies continue to grapple with questions of how best to achieve competitiveness, growth, and equity amidst the tide of globalization. as economists, we must use every opportunity not only to ask the important questions but also to try to piece together answers that would help our economies. but while attempting to do so, and as we engage in elegant and animated discussions in the days ahead, let us be mindful that no one has a monopoly over wisdom. even the venerable alan greenspan now projects newfound humility, admitting to a lapse in judgement. and so, fellow economists, let us ask the questions – as we should, keeping in mind that it is the collective wisdom of this group that we should mine. let us live up to the challenge before the participants to this 46th annual meeting of the pes : to have a fruitful meeting on “ competitiveness, growth, and equity in a globalizing economy. ” may this pes annual meeting be remembered as a complete success. on this optimistic note, i welcome all of you, once again, to the bangko sentral ng pilipinas. mabuhay ang philippine economic society! mabuhay ang pilipinas! salamat sa inyong lahat!