( ii ) introduce a regime of macro - prudential indicators and a framework to be used as an early warning system for an emerging crisis ; and ( iii ) formulate agreed strategies for the timely and orderly intervention into the affected institutions so as to limit the impact on the regional financial system. while we can never rule out another regional financial crisis we can certainly be more prepared than we were, when it happens again. let me end where i started with reference to the movement – occupy wall street – i think there is a message there for us ( and i think that public reaction to the clico crisis underscores this message ). the message is that banks and other financial service industries have a responsibility to the country ’ s development and a sacred obligation to consumer wellbeing, even as they keep an eye on their bottom line. i think that regional regulators need to listen to and be responsive to the voices of consumers of financial services if trust in the regional financial system is to be maintained and strengthened. thank you. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

could potentially invest about $ 1. 1 billion in equities, if they so chose. they have not done so because of their own investment preferences. this proposed scheme would free up another $ 1. 5 billion for equity investments. this amount compares with $ 700 million which was taken out of the equity market by pension funds since the end of 2005. in our discussions with the stakeholders it was felt that pension funds desirous of making use of this option should ( i ) prepare an investment policy, in accordance with the central bank ’ s guidelines on prudent person approach to investment and lending which was issued in may 2005 ; and ( ii ) submit quarterly reports to the central bank. the proposed approach – which is a liability - based approach – is not without its implementation problems. a major implementation challenge will be to ensure the accuracy of the liability data and consequently the calculation of the pension fund ’ s surplus, on an ongoing basis. liability information will always be out of date given that investment management operates on a continuous basis but actuarial valuations are done at fixed dates, typically once every three years. it will be very costly ( and a major challenge ) to require annual actuarial valuations. however, a possible fall - back will be to operate on the basis of estimated annual liability figures ( following the three - year actuarial exercise ), based on the assumptions utilized to produce ias 19 figures ( that ’ s the calculation of the pension surplus that feeds into the sponsoring company ’ s annual balance sheet ). one would need to examine the feasibility and implications of using this estimation procedure more carefully. another issue is that as of now, there is no standardized actuarial regime in trinidad and tobago, for pension funds. actuarial liabilities depend on the actuarial methods and assumptions used to determine them and as you know, there is a range of acceptable methods and assumptions. this has important consequences if liability values are used as a basis for equity limits. let me end with some thoughts on considerations to be taken into account in the preparation of the permanent investment regime for pension funds ( the new legislation that we expect to have in place in a period of eighteen months to two years ). the current orthodoxy is that pension plans should be free to invest as much or as little as they want in equities provided that it is done on a “ prudent person ” basis and is done within the framework of a proper investment policy. this investment policy should