exercise of disciplinary power over solicitors and macao gaming commission, with a view to enhancing aml efforts of the sar through improved planning, organizing and implementation. such responsibility was shifted to the financial intelligence office with effect from november last year. in the whole process, we not only assiduously supervise aml / cft work of the industry, we attach a lot of weight to co - operation with other regulatory authorities and international organizations. in this respect, amcm has concluded co - operation agreements and memoranda of understanding with other regulators such as the people ’ s bank of china, china banking regulatory commission, china insurance regulatory commission, hong kong monetary authority, hong kong securities and futures commission, hong kong insurance bureau, bank of portugal and institute of insurance supervision of portugal to enhance cross border supervision and exchange of information. on the other hand, amcm is doing its utmost to fulfil the duties of aml / cft of the msar accountable to the offshore group of banking supervisors ( ogbs ), offshore group of insurance supervisors ( ogis ) and the asia / pacific group on money laundering ( apg ). as early as 2001, macao invited representatives from the ogbs and apg to conduct a first round joint appraisal on the aml / cft efforts of macao. in the same year, we invited imf to conduct a comprehensive appraisal on the financial system of macao. we secured positive comments in these two appraisals. suggestions for improvement were raised at the same time. these suggestions, particularly those related to financial field, were implemented through the guidelines we mentioned above and supervisory work. in december 2006, the sar government again invited the ogbs and apg to conduct a second round aml / cft appraisal. the appraisal report is yet to be finalized and approved by the organizations, but the appraisal working unit has passed a positive judgment on the aml / cft efforts displayed by the sar government in the past few years. after the promulgation of the aml / cft legislations, the relevant implementation has started. from formulation or revision of supervisory guidelines to their actual implementation, from staff training to enhancement of public awareness, from the formation of responsible organization or confirmation of responsible personnel to supplement and finalization of internal system, from trans - department, trans - organizational co - ordination and co - operation to deepening of external communication, every facet is proceeding according

a financial institution should adopt a check and balance approach in management. in the heyday, deal makers in a financial institution are the golden boys. they tended to disregard those who are supposed to control risks. normally, when there was an argument over whether a certain deal should be done, the senior management, whose year - end bonus may depend on the current year revenue, or who are more concerned with the profit and loss account of the institution, would invariably stand on the side of the deal maker. this is usually the root of huge losses to be incurred later. to harness risks, the risk management function should be vested with more authority. the internal control function should go to board level. there should be a minimum level of knowledge of internal control to be required for all audit committee members. knowledgeable internal controllers and anti - fraud experts may be hired by financial institutions to implement risk - assessment and fraud prevention measures. measures and procedures are to be implemented to prevent management overriding internal control systems. the greatest safety to ensure the stability however comes from self disciplined practitioners of the financial sector. legislations and regulators are serving merely as directions and referees. it is the professional skills and ethics of practitioners which will give the greatest comfort and protection to a financial institution and hence the financial system as a whole. it is therefore the endeavour of human resources function to provide adequate training in these respects, especially ethics, in order to have a long term solution which warrants the stability of the financial system. macao returned to china in 1999. this year is the 10th anniversary of the founding of the macao special administrative region. under the principle of “ one country, two systems ”, “ macao people ruling macao ” and “ high degree of autonomy ”, macao ’ s economy has grown by leaps and bounds. the financial sector has burgeoned in tandem with the spectacular performance of the overall economy. we have witnessed a surge in deposits, assets and profits in our financial sector. capital adequacy ratio for the banking sector is well above what is required by the basel committee while non - performing loans ratio lingers at a low level. our financial system is not immune to the financial tsunami but it has emerged unscathed. there is however no ground for complacency. the financial sector and the regulators are adopting a prudent and cooperative approach and have been working in harmony in the best interest of the community. we are doing our best to attract qualified people to join the financial