and macroeconomic stability. i believe that the benefits from this interplay are best realized when the supervisory functions are integrated and placed in one umbrella organization such as the central bank the most logical location, bearing in mind the synergies that i mentioned. in other words, in the jamaican context, my preference is for an integrated and autonomous supervisory authority within the central bank. traditionally, the central bank ’ s main objective is the achievement of monetary and financial stability as a means to enhancing macroeconomic stability, growth and development. financial stability has always therefore been an important aspect of central banking. in pursuit of its twin functions, the central bank closely monitors developments in the financial market, interacts regularly with its primary dealers and other market players and analyzes the risks to the financial system. over the last ten years the central bank ’ s emphasis on financial stability has increased because of the increased potential for systemic risk. the transformation in the structure of financial markets and the continuing increase in volumes and products, have contributed to increasing the potential for risk and fuelled the need for a greater degree of interdependence in the pursuit of macroeconomic and financial stability. we have seen the challenges that recent developments in financial markets have posed for central banks both here and abroad. indeed, these developments point to the dynamic and intricate links between central banks and financial markets. the northern rock case certainly reinforces the importance of these links and points to the need for a more integrated approach to the analysis and management of financial market activities both from a central banking and supervisory point of view. this is especially important in an environment of continuing change and particularly relevant to emerging and vulnerable market economies such as jamaica. there is no doubt that the achievement of a strong and resilient financial system is enhanced by the continuous improvement in the analysis and management of risk. indeed, that is the subject of the basel ii framework. but the achievement of a strong and resilient financial system is also augmented by sound and sustainable monetary and fiscal policies. the linkages are therefore critical. furthermore, and speaking from the perspective of the bank of jamaica, the ability to act effectively in a financial crisis is enhanced by the fact that the supervision of commercial banks resides in the central bank. indeed, the bank ’ s current supervisory function helps the central bank to obtain timely and reliable information regarding conditions in the banking sector and the payments system. but over the years the changing financial landscape has spawned a variety of institutions other than the traditional commercial banks. the bank

derick latibeaudiere : workshop for mutual evaluation examiners on the 2004 imf / world bank aml / cft assessment methodology remarks by mr derick latibeaudiere, governor of the bank of jamaica, at the opening of the week - long workshop for examiners, held at the bank ’ s training institute, kingston, 14 - 18 february 2005. * * * let me extend to you all a warm jamaican welcome to the bank of jamaica and to this workshop. special welcome to the representatives from the caribbean financial action task force ( cfatf ), international monetary fund ( imf ), world bank, and our visitors from central america and the caribbean. news reports show record low temperatures in north america this winter, so i therefore trust that our visitors from that region will particularly enjoy our tropical climate this week. i recall that it was not too long ago that we hosted a similar training programme on what was then a new methodology for evaluating anti - money laundering frameworks. it seems to me that the speed with which the assessment methodologies have been evolving is true testimony to the dynamic nature of money laundering and terrorism financing. recent trends indicate that although currency is still the primary form of illegal proceeds and although financial institutions remain the most common avenue for money laundering, new aml / cft challenges are emerging from electronic money, internet banking, internet casinos and other state - of - the - art forms of money transfer. this makes it very difficult to apply the standard aml / cft techniques, including “ know your customer ” and requires that regulators and supervisors impose even more stringent methods of detection, prevention and sanctions. these developments also call for a dynamic response from national authorities to ensure that their economies and societies are protected from the scourge of money laundering. consequently, we welcome this workshop from which we hope to gain fresh insights into the new methodology that has been developed by the imf and assistance in adopting more proactive mechanisms for countering the twin threats of money laundering and terrorism financing in our respective jurisdictions. the reports from various regional cfatf meetings have indicated that the entire caribbean region remains committed to the fight against money laundering and terrorist financing activities. our countries are at various stages of endorsing the international standards and recommendations for best practice, but more importantly, our respective jurisdictions are all actively involved in the initiatives to give practical effect to these standards. furthermore, the seriousness with which the caribbean as a region treats with anti - money laundering and terrorist financing