analysis of roles and responsibilities of each individual in your respective banks? more crucially, do all desks have a job profile? ” at least in the banks that i have bis central bankers ’ speeches worked i have not seen a detailed job role of each individual or a job profile of each desk. unless you do that, i am not sure how you can be sure of the number of people that you need. defining job role of each desk would also enable an assessment of the skill sets required to man that desk. thus, it would also help the hr in mapping each desk function to the available manpower by imparting training to the existing staff or by recruiting appropriate people with the desirable skill sets. also, unless you have a detailed job role for each individual how can you make a fair assessment of whether your people are performing or not? i will return to the subject of employee performance measurement in a little while. so, the first task for all of you is to define the job prolife for each desk. believe me, the exercise could throw up some surprising outcomes as it might highlight the redundancies you have in certain job profiles. performance measurement system 8. let me now come to the second area which needs a thorough overhaul in most, if not all banks – the employees ’ performance measurement system. incentivizing talent with fairness and transparency is a key objective of hr managers and the goal of the promotion policy of every organization. a transparent performance management process enhances the abilities and morale of the human resource. as a part of the top management in all banks, wherever i have worked, i have faced a typical situation at the conclusion of every promotion exercise. invariably, i hear from my hr department, that few people are “ promotable ” but not “ postable ” and then there are certain others who are “ postable ” but not getting promoted. the reason for emergence of such a situation is the faulty performance management system ( pms ) that we have in the banks. the pms is highly subjective or impressionistic and quite often determined by factors other than actual performance at the work place. in fact, i observe that performance rating of a big majority of the employees falls in the top quartile. but the hr continues to complain about not having adequate number of good people. this dichotomy highlights the failures of the existing pms in banks. 9. so, as i mentioned before, the way to make the pms work, is to make

stress this fundamental aspect. if we fail to adhere to it, we will then have all the ingredients for further crises. a number of the criticisms directed at re - regulation concern its contradictions, real or assumed. for example, some feel that the tightening of capital and liquidity ratios is too severe and risks adversely affecting the financing of economies. does this criticism strike you as justified? jean - claude trichet : in our view, the rules which have been defined for capital requirements are optimal. we reflected long and hard on them. of course, there are arguments in both directions, but considering the drama resulting from a crisis in terms of lost growth and job creation, we gain a lot more by being reasonably demanding in terms of capital. preventing further crises from occurring is a benefit that far outstrips the potential losses, if certain analyses are anything to go by. let ’ s be clear one more time : these decisions, debated at length by those primarily responsible, have been evaluated at governor and ministerial level and adopted at the global level by heads of state and government. they must be implemented. another criticism : this tightening of the rules runs the risk of producing a concentration in the financial sector, and on the financial markets as well, which is even stronger than it is today. jean - claude trichet : i do not believe so. we must be constantly and closely vigilant with regard to the structural changes to international finance. there are permanent risks that we must continue assessing, but i do not think the rules we have just defined, or those still being worked out, will lead to this hyper - concentration. on the contrary, i have to say that one of the main lessons of the present crisis is that there were very high risks associated with what i would call the “ financial mammoths ”. is too little attention being paid to the much - discussed area of “ shadow finance ”? – the issue of the “ non - banks ”, of shadow finance, and of all the institutions or market participants not under the oversight of the banking supervisors, is very important. over the last two decades we have witnessed a tremendous explosion in new financial institutions. i myself lived through a period during which all the institutions with high leverage, by the end of the 1980s, were managing capital worth something in the region of usd 100 billion. 17 years later, in 2007, the figure was usd 3, 000 billion! very significant financial services have been, and are being, rendered by these market