played its part with credit - granting institutions moving to offer debt restructuring options and moratoriums to assist clients struggling to repay their debt obligations. similar to what has been done worldwide, the central bank of seychelles also introduced several policy measures to support the economy. to name a few, for the first time, the bank introduced a private sector relief scheme providing for two credit lines to assist impacted msmes and large businesses. the country ’ s international reserves was used to support the domestic foreign exchange market through the conduct of foreign exchange auctions and direct foreign exchange sales to two key entities, to ensure the availability of fuel and essential goods. when it comes to monetary policy, an accommodative stance has been maintained. amendments have been made to the central bank act to cater for temporary advances to the government and purchase of government securities in force majeure events. other relevant legislations have also been 1 / 2 bis central bankers'speeches amended, allowing for the suspension or variation of certain prudential requirements, as deemed necessary. in parallel, covid - 19 has highlighted some fundamental lessons and presented opportunities for individuals, businesses, policymakers, regulators and economic agents to take action to be better prepared to face future eventualities. the increasing pace of digital transformation and the need to have robust cybersecurity frameworks in place ; the importance for businesses and work organisations to build resilience by establishing a risk management and business continuity framework ; and the need to have a more diversified economy to assist sustainable economic development and provide a better safeguard against future shocks are but a few of the major takeaways. for the supervisors, the lessons are equally numerous. the importance of crisis preparedness, management and resolution, as well as the need for effective cooperation, coordination and risksharing, both at a domestic and external level, has never been more critical if we are to have a more coherent response and recovery approach. the pandemic has also further underscored the need to expedite efforts to develop the country ’ s financial stability framework to cater for the ever - changing financial stability risks. similarly, access to timely and comprehensive data and practical analytical tools such as stress tests are crucial to better assess and address financial risks. the covid - 19 experience has also reinforced the importance of having flexible regulations to enable supervisors to adjust the regulatory requirements to respond to a crisis and the need to strengthen the governance of institutions charged with the supervisory role. this will allow supervisors to be more responsive,

level with regard to each bank ’ s capital needs. this effect is critical now that qualifying banks choosing an advanced approach to credit or operational risk will be allowed to apply some of their own assessments of risk in the calculations of their minimum capital requirements. we might view the entire three - pillar structure of basel ii as a series of built - in reality checks for management ’ s decision - making. in this regard, the three pillars of basel ii are intended to make sure that management assesses and controls its risks carefully and that it takes the steps necessary to allocate the appropriate capital. as you know, in the first pillar, the minimum capital requirements focus management ’ s attention on identifying, assessing and quantifying risk within a specified framework. this puts the onus of analysis and decision - making on the right set of shoulders : bank managers are in the best position to evaluate their risks and are ultimately responsible for responding to them. when banks consider their risks more comprehensively and work to evaluate rigorously the magnitude of losses that they may face, they are improving the quality of the information at their disposal. that, in turn, should improve their ability to arrive at sound decisions regarding the amount of capital that they may need to weather potential losses in the future. considerable attention has been paid to some of the formulas and techniques that we have adopted in pillar 1 to help quantify the potential for losses related to credit and operational risk exposures. we must remember that these formulas are not revolutionary. in fact - in one of many examples of how basel ii seeks to reflect reality - the new framework draws on the tremendous advances that many firms have already achieved in quantifying their exposures to credit and operational risk. this reflects as well one of the committee ’ s goals to build the new framework on sound risk management practices in use today and to provide sufficient flexibility for it to evolve with advances in the future. at the same time, the committee knows that mathematical formulas and financial models are only as good as the assumptions they make. at best, therefore, they serve as supplements to our insight : they do not replace our need for expertise and judgement. even einstein warned of the dangers of confusing mathematical certainty with reality. he said once that, “ as far as the laws of mathematics refer to reality, they are not certain ; and as far as they are certain, they do not refer to reality. ” reasonable supervisors and bankers know that we cannot rely purely on the apparent mathematical certainty of models and formulas