the bretton woods institutions should be reflected in a declining trend of the overall number of fund - supported programs over time. there are legitimate cases which require access to fund resources. however, the fund ’ s financing role should and can only be catalytic, given its limited resources. while policies, such as the exceptional access framework, are in place to safeguard fund resources, they are often not adhered to. i am also concerned about the prolonged use of fund resources which is out of line with its mandate. countries that run imf - supported programs over many years or decades are probably not a demonstration of success. thus, the imf should strive to prevent that countries become dependent on imf financing. during the debt crises of the early 1980s, the imf acted more as a crisis manager or the official agent in charge of concerted bank lending. this role has shifted over the years, with the fund now practically resolving countries ’ financial crises on its own. an important initiative to reposition the fund once again as a crisis manager came to be known as the private sector involvement ( psi ) initiative. psi encapsulates the official sector ’ s attempt to engage the private sector in crisis resolution more effectively. the private sector has to assume responsibility for its investment decisions. this is grounded in my firm conviction that a collectivization of private sector losses would distort the allocative efficiency of capital markets and would lead to moral hazard via increased risk - taking. another important initiative, which the imf started to discuss in late 2001, proposed to establish an international bankruptcy procedure for unsustainable sovereign debt ( sdrm ). i believe that this mechanism would have made the psi initiative more operational. however, the time may not have been ripe yet for such a comprehensive framework for the restructuring of sovereign debt. nevertheless, public and academic awareness has been raised. the debate has helped in that many emcs have introduced collective action clauses ( cacs ) in their sovereign bond contracts and major emcs and the private sector are discussing a code of conduct. this notwithstanding, i am firmly convinced that we need an international arrangement which would facilitate the orderly resolution of sovereign debt crises. such an arrangement would also help shift the function of the imf from its current role as crisis solver to crisis manager. 5. economies in transition, developing countries and poverty reduction in addition to finding more effective mechanisms for crisis prevention and management, the international community faces another major challenge, the eradication of poverty. one

market conditions. we consider the interconnectedness of economic agents, credit concentration and liquidity, and the evaluation and pricing of risks. our approach is pre - emptive to mitigate any undue risk build - up in the financial system, but we have also built up solid macroeconomic fundamentals that serve as buffers to weather potential external shocks. these safeguards notwithstanding, bsp continues to refine existing early warning systems, distress indices and stress tests. bsp is constantly developing financial and economic models that improve our understanding of how relevant variables move. trusted and dedicated team to be successful in mountain climbing ( like facing the challenges of the banking industry ) one cannot go up alone. it is not a solitary undertaking. climbers must learn the basics from other climbers, as well as help each other up from time to time. in our industry, this means we must develop close collaborations and relationships and encourage communication. i am fortunate that i have inherited a very capable and competent team bsp where each public servant contributes to the fulfilment of our mandates. we can also depend on the collaboration and synergies among valued stakeholders like baiphil. indeed we cannot do it alone. competent leadership ladies and gentlemen, possessing close familiarity with “ the mountain and mountains ” of banking, we could consider the bangko sentral and baiphil as the industry ’ s ‘ sherpas ’. we provide guidance and direction to others in the industry as we walk the same path. we guide towards the shared vision of upholding a stable and inclusive banking system. under my 2 / 4 bis central bankers'speeches stewardship, this will be pursued with fervour. as our fellow sherpa, the bsp counts on baiphil to take on even greater significance in this age of global convergence. together, we have to prepare the banking community by anticipating harder but more fulfilling climbs ahead. through continuous training and education, the banking profession will be better equipped and prepared to keep pace with the ever evolving financial services industry. tenacity and courage in the book, “ the last step : the american ascent of k2 ” / it is said that, “ the courage of mountain climbers is not blind, inexplicable, meaningless ; it is courage with ability, brains, and tenacity of purpose. ” in this industry, this is the same brand of courage we must have to achieve our goal of banking and financial stability. our courage is