term contracts in a single fund for the benefit of policyholders. a typical resolution involves run - off over a long period, which remains a sensible approach. but the public policy interest is reasonably directed towards ensuring a process of resolution, which is fair to those various vintages and more broadly which allows more rapid payout to policyholders, since the current arrangements can involve long delays and pressure for policyholders to accept lower payouts in return for greater speed. this is a different, but nonetheless important, public policy interest in orderly resolution. i am very clear that when firms mess up, they should be allowed to fail, and by doing so they are putting at risk the money of their shareholders and if necessary after that, those who provide debt funding according to levels of seniority. but i am also very clear that really bis central bankers ’ speeches achieving the objective of avoiding a no failure regime requires a fundamental change of mindset both inside the pra and in society more broadly. fear of failure is an important conditioner of behaviour in a financial regulator, and achieving a change on this front depends on establishing a wide acceptance of our approach that orderly failure that does not compromise our public policy objectives is an acceptable outcome. to be clear, we should be criticised where failure compromises those objectives and we could have taken steps to avoid it, and we will be required to report on such failures. but if failure is orderly, and does not compromise our public policy objectives, the responsibility should rest with the board and management for failing to serve the private interest of their shareholders and creditors. last on the theme of failure, having firms that are either too big or too important to fail is bad for competition in the industries that we regulate. an industry where exit is too difficult is one where entry is likewise inhibited. put simply, if we don ’ t know how to deal with a failed firm, we will inevitably set a higher barrier to entry. this is what we see in the banking industry. embedding resolution into the public policy objectives of financial regulation matters for two reasons relevant to competition : first, because, to repeat, exit enables entry ; and, second, because if, as we will, we require new entrants to satisfy us on their resolvability in order to be authorised, we can lower the barriers and costs of opening for business. we have already started to put this new approach into operation. resolution of failed firms consistent with the public policy objectives is one key plank of

hamad al - sayari : challenges posed to investment in saudi banks speech by his excellency hamad al - sayari, governor of the saudi arabian monetary agency, to the symposium on challenges posed to investment and saudi banks, riyadh, 2 december 2006. * * * dear audience, at the beginning, i would like to welcome all honorable attendance. it gives me a great pleasure today to address you at the outset of the deliberations of this symposium on " challenges posed to investment and saudi banks in an environment of global economic openness " which is convened at a time the kingdom is witnessing a period of economic growth accompanied with and enhanced by steps of economic reforms in the fields of streamlining of regulations, restructuring of the national economy, and approval of a number of mega development projects as well as the accession to the world trade organization which is an important step towards enhancing integration into the world economy, coping with economic developments, and attraction of foreign investments apart from accession to global markets which will be reflected on the competitive capacity of the national economy. dear audience, the current symposium is being held in a promising economic environment in this country. the kingdom has recorded outstanding economic results. the real gross domestic product rose by 6. 5 percent in 2005. this growth rate was reflected on almost all sectors of the economy which is characterized by strong investment. international rating agencies recorded their appreciation and certified the efficiency and strength of the national economy. eventually, they raised the credit rating of the kingdom to advanced grades. this environment promoted the interest of foreign investors to participate in and benefit from the various investment opportunities available in the saudi economy. the saudi banking system has played a vital role in the enhancement of the national economy. thanks to its use of the latest technologies and various banking products, the banking system has witnessed good development under a supervisory system which is very keen to meet domestic requirements and legislation and to comply with international standards, including basel capital adequacy standard. the banks operating in the kingdom are very serious in the application of this standard. as a result, the kingdom's banking system has become one of the advanced systems, not only at the regional level but also at the international one. dear audience, basel ii standards are the most important supervisory initiatives of this decade, and they will have a considerable impact on changing the conduct of risk management at all banks regardless of their size and location. the standards aim at achieving a number of objectives, including ensuring the capital adequacy of