##lated into a balanced and flourishing economic environment will they identify with society to the extent that they work actively towards its goals - which in turn is essential to the successful shaping of the appropriate economic framework. the resulting social equilibrium, i. e. political stability, creates the necessary confidence in a stable and sustainable development that is so essential to a financial centre. today, there is a tendency for people to retreat into the role of the pure economic subject. i see this as a worrying development, and indeed as posing a threat to both the economy and society. based on what i said earlier, the economy and society can only flourish in a balanced environment. but this balance can only be achieved if the citizens are aware of their dual responsibility and act accordingly. - 3we have talked about economic stability, political stability and the human factor. these are the elements which define the substance of a financial centre, and the necessary symbiosis between them hinges on the actions of the individual. but we should not forget the importance of other major aspects such as a clearly defined legal system and a properly functioning technical and organisational infrastructure. i would also like to address another aspect that is of particular importance to a central bank : the stability of the system. maintaining stability in the financial sphere should not be viewed in isolation, as it is closely interlinked with the human and economic factors discussed earlier. political and economic stability, the quality of the human contribution, a clearly defined legal order and an efficient infrastructure are the keys to the success of a financial centre. to this, we should add a reputation which is founded upon a sound attitude and a good track record, going beyond the criteria we have enumerated. stability of the financial system is a concern primarily for the market participants themselves. furthermore, it comes within the remit both of the bank supervisors and of the central bank, which is responsible for monetary policy. as you know, responsibilities and powers are kept separate in my country, the task of supervising the banks being assigned to an independent body, the federal banking commission. discussion about whether it would be preferable to unite the two institutions under one roof has been going on for a long time. both solutions clearly have their advantages and disadvantages, each of which may be weighted differently depending on the requirements of society. consequently, the debate must be pragmatic and not dogmatic. we believe that our approach has proved its worth and do not see any need for radical change. it is clear, though,

will help to influence african, caribbean and pacific governments in their advocacy for innovative sources of development finance to be a front - burner issue on the international economic agenda. ladies and gentlemen, it is no secret that small vulnerable economies in the caribbean have grappled with external shocks of varying magnitudes and duration over the past two decades. these shocks include a compression of aid flows, dismantling of preferential trade arrangements for sugar and bananas, interventions related to anti - money laundering and combating the financing of terrorism. more recently, the caribbean has been gradually recovering from the shock of the global financial crisis, which originated in the united states and spread to europe, the region ’ s two closest trading and investment partners. the untold story, however, is that the combined influence of these multiple shocks has led to a dramatic and fundamental shift in the composition of external financing flows to the caribbean. bis central bankers ’ speeches in my respectful view, the most significant change in the regional pattern of external resource flows stemmed from the sharp compression in official development assistance ( oda ). flows of oda to many caribbean countries began falling in the 1990s, as donors redirected their aid priorities to the newly emerging commonwealth of independent states and the least developed countries. this is certainly ironic because the eighth mdg recognizes that developing countries require more generous development aid to have the best chances of reducing poverty and accelerating development within the stipulated 15 year timeframe. faced with declining aid resources, many caribbean governments resorted to more expensive commercial borrowing to bridge their funding gaps. this, combined with the growing inability of regional governments to generate high enough primary fiscal surpluses for debt servicing, contributed to a large public debt overhang. gross public debt in the caribbean climbed rapidly from 65 percent of gdp in 1998 to a peak of almost 100 percent of gdp in 2002, before falling to a still elevated 80 percent of gdp in 2012. the accumulation of public debt was even faster in the eastern caribbean, moving from just over 60 percent of gdp in 1998 to a high of almost 120 percent of gdp in 2004, before falling to 95 percent of gdp in 2012. generally, a public debt ratio of over 90 percent of gdp is considered exceptionally high. by this measure, four countries in the caribbean are projected to hold exceptionally high public debt in 2013 : jamaica ( 140 percent ), st. kitts & nevis ( 139 percent ), grenada ( 109 percent ), and antigua & barbuda ( 93 percent ). another six