jean - claude trichet : a new banking supervision programme for egypt introductory statement by mr jean - claude trichet, president of the european central bank, at the press conference on the occasion of the signing a memorandum of understanding with the central bank of egypt on a new banking supervision programme, cairo, 26 november 2008. * * * dear governor, minister, ambassador dear colleagues ladies and gentlemen it is a pleasure for me to be in cairo today to sign the memorandum of understanding with governor el okdah. this signing confirms the close cooperation between the central banking community of the european union and the central bank of egypt. we are also committed to working very closely together over the next three years, to implement a technical assistance programme that aims to design a new set of egyptian banking supervisory standards and principles inspired by international best practices. the programme will start on 1 january 2009 and will be financed by the european commission in the framework of relations between the european union and the authorities in egypt. i should like to thank mrs fayza abu el naga, egyptian minister for international cooperation, and dr klaus ebermann, head of the delegation of the european commission to egypt, for witnessing the signature of the memorandum of understanding and for committing to undertake all necessary steps to have the programme in place by the end of 2008. i will first say a few words on our cooperation with the central bank of egypt over the last couple of years before addressing what we aim to do together during the next three. finally, i will share with you some thoughts on the present financial market turmoil, its implications on global financial stability and the lessons that we can draw from this. the eurosystem, i. e. the european central bank and the national central banks of the euro area, has enjoyed close relations with the central bank of egypt for many years. since 2004 we have been holding high - level meetings at our mediterranean seminars, where central banks from the euro area meet their counterparts from the southern and eastern shores of the mediterranean to exchange views on issues of common interest. the fifth such seminar will be held tomorrow in alexandria and will be hosted by governor el okdah and his colleagues from the central bank of egypt. i am convinced that the discussions tomorrow will be very interesting – we will also be holding a press briefing afterwards. our cooperation with the central bank of egypt reached a new dimension in 2005 when we started a programme of cooperation in the area of banking supervision. over two years, many banking supervisors from germany, greece, france and italy

i may call globally prevalent noises in regard to relations between central banks and governments, especially the ministry of finance. first, the very purpose of creating a central bank is to have a slightly longer term view of macro - economic management. hence, its perspectives are likely to be different from those of the government. secondly, the design of a central bank involves, among other things, separation of powers to spend money ( which is with the government ) from powers to create money ( which is with the monetary authority ), with a view to avoiding inflationary financing of government spending. hence, the focus and emphasis could be different due to the design itself. thirdly, the distinct apolitical identity of a central bank helps the countries to mitigate some possible adverse consequences of spurts of political instability, by enabling the currency and the credit systems to operate as smoothly as possible at all times. fourthly, the interests of the government, as a borrower in the financial market and also as a significant owner of entities regulated by the central bank, may not necessarily converge with those of the central bank. finally, if a central bank always concurs with the government, the central bank, as a distinct entity, becomes superfluous, while if it persists in constantly disagreeing, it becomes obnoxious. in reality, the relevant issue is how checks and balances work in a given context. rbi : approaches to managing reform as a part of economic reforms, public policy in india has enabled changes in the domestic economy and has been responding to changes in the global economy while reorienting the public institutions to meet the consequent newly emerging demands on them. the rbi is also a part of this process of managing reform. i would highlight some of the approaches adopted by the rbi in managing the reform process. first, considerable attention is being paid to enhancing the knowledge base and skills within the institution. rbi officers are encouraged to upgrade their skills on a continuous basis. select officers are trained, for about one year, in leading universities, including harvard, stanford, oxford, yale, lse, etc., and these officers number around ninety so far. there are on our rolls, about 60 ph. ds and over a hundred mbas focusing on the financial sector. elearning is facilitated through the financial stability institute. there are incentives for acquisition of academic qualifications on a full - time or part - time basis. these are in addition to sending officers to several training programmes, both in