bank supervision in particular and financial supervision in general is still in its early evolutionary stage. with the fast changes in financial markets and information technology, the methods of ensuring the safety of banks will also need to change. already, the rules relating to bank operations are changing in many parts of the world. this means that the ways banks are supervised also need to be changed. the responses to these rapid changes may be slow, but there is concerted and dynamic effort by the international supervisory authorities to ensure the safety of banks. thus, banking supervision is conducted in the interest of everyone because the cost of a banking crisis can be enormous. when banks fail, we all fail. and certainly, the cost of a banking crisis will be unbearable especially for our relatively small economies in the pacific region. i note that you have a full agenda ahead of you. at the same time, i have no doubt that the choice of topics is to provide discussions, which should add value to your work not only in your own countries but also for the pacific region. the case study that will provide the experience of palau regarding the failure of one of its biggest bank, will not only remind us of the reality and the crucial role of bank supervisors, but it should bring us together to learn from it and be better prepared for the possibility of such crisis occurring in our own respective countries. i also note with interest that you will be covering the basel revised core principles which, as i mentioned earlier, reflect the ever changing environment in which banks operate, that international standards continue to change as the environment of risks also changes. and as part of the global financial system, we all need, to some extent, to adapt to such changes. although some of these changes may not directly affect us due to our narrow market base, others can impact on our financial system indirectly. one of these changes would be the basel ii new capital adequacy framework that has already been advanced for some years for adoption. from experience, the new capital accord will have significant impact on our limited resources and our capacity to administer and properly implement. in this connection, i am pleased to acknowledge the presence of resource experts, ms elizabeth roberts, director of the financial stability institute ( fsi ) at the bank for international settlements, basel ; messrs graham johnson and chris gaskell from the australian prudential regulatory authority ( apra ) ; mr kim norris, director, international advisory group, osfi, canada ; and experts from the ifc. i am

based on a clear pact : national reforms and, not or, european coordination. this full coordination also rests on the setting up of a strong and legitimate european institution : a euro area finance minister backed by a european treasury system and subject to greater democratic accountability. this finance minister would be in charge of defining the collective strategy, supervising its decentralised implementation by member states and handling crisis management tools. going forward, he / she could also be in charge of a common budget. bis central bankers ’ speeches