bimal jalan : seminar on international financial architecture remarks by dr bimal jalan, governor of the reserve bank of india, at the symposium of central bank governors, hosted by the bank of england, london, 5 july 2002. * * * today ’ s topic is a very large one and the time available to us is relatively short. to make the maximum use of the time available to me, i will make four broad points rather than deal with any specific issues relating to the international financial architecture. these, we can deal with later in the seminar during the question / answer period. the first point that i want to make is that we need to recognize that the period of the 90s, despite many gains, has seen many more financial crises than the earlier decades. the most distinguishing characteristic of this period is a marked increase in volatility in exchange rates and capital flows. the swings in these areas have not only been large, but also unpredictable and unanticipated. thus, we have seen a large number of currency crises, for example, in mexico, russia, east - asia, brazil and currently argentina, turkey, and emergence of currency pressures in brazil and paraguay again. exchange rates of industrial countries, notably dollar, euro and yen have also shown both short - term volatility and large medium - term movements. capital flows, particularly to emerging markets, have similarly been volatile, with a boom phase being followed by an abrupt and equally large reversal. another feature of the abrupt movement in exchange rate is that while crisis initially occurs in one or two countries, their adverse effects can be felt across the world. in the light of the recent events following the argentina crisis, it is also not clear whether the contagion effect from one country ’ s problems to others has actually been contained, as was assumed only a month ago. as i said, there have been real gains also in terms of benefits from higher capital flows and more flexible exchange rates. however, it is also a fact that the international financial environment has become substantially more uncertain, unpredictable and unstable in the 90s than in the previous half - century. the second broad point that i want to make is that the present international financial architecture, which was designed at bretton woods after world war ii, was for a different era altogether - one of fixed exchange rates, preponderance of “ official ” and stable capital flows, and temporary current account deficits which could be met with temporary access to imf credit. the bretton

bandid nijathaworn : risk management and pillar ii implementation opening address by dr bandid nijathaworn, deputy governor of the bank of thailand, at the fsi - seanza regional seminar on the implementation of the supervisory review process ( pillar ii ) of basel ii, bangkok, 21 - 24 april 2009. * * * distinguished speakers ; and colleagues from seanza central banks and regulatory authorities, let me begin by extending a warm welcome to all of you to bangkok, and on behalf of seanza members, i would like to express our appreciation to all the speakers, as well as the fsi, for their contributions to make this fsi - seanza regional seminar on the implementation of the supervisory review process possible. this is all the more so as this seminar had to be rescheduled from last year, and in this regard, let me express our commitment that the bank of thailand stands ready to facilitate you and ensure that your experience here will be a fruitful and enjoyable one. ladies and gentlemen, the current global financial crisis underscores the need to strengthen risk management and risk - based supervision, so that we can deal more effectively with the increased complexity arising from both financial product innovation and increased interconnectedness between financial institutions. as for the current crisis, while many causes have been identified, what has become very clear is that financial institutions, capitals were not adequate given their risks, and this had allowed over - leveraging by financial institutions as well as by their customers, leading to over - indebtedness and asset price bubbles. the issue, therefore, underscores the inadequate risk management, covering the entire process : from the lack of proper risk measurement, especially with regard to complex product, as well as liquidity risk, to inadequate risk management and control, and to micro - prudential risk - based supervision. in addition, there is now greater attention being paid to the importance of macroprudential approach, in recognition of the risk from procyclicality and interconnectedness of institutions, especially the large and highly complex financial institutions. also, greater recognition is given to the problem of the unregulated shadow banking sector, like the hedge funds, which are also key in systemic risk process. all these issues pose a major policy challenge, as indeed the various working groups and committees of the bis are now working on the guidelines, and on the key issues such as accounting, valuations, procyclicality, and