THE Governor of the Central Bank of Solomon Islands (CBSI) urges the supervisors and the regulators in the region to be more vigilant in their regulatory and supervisory roles to encounter global financial risk.
Mr Denton Rarawa made the call during the opening of the Association of Financial Supervisors Pacific Countries meeting at Heritage Park Hotel yesterday.
He said, AFSPC region is not isolated from global community and any shocks affecting the global economy and the stability of the global financial system is certainly going to have ripple effect on the AFSPC region.
“A clear message from the latest global financial crisis has taught us an important lesson of not to be complacent,” he said.
Mr Rarawa said according to the IMF’s April 2015 Global Financial Report (GFR), risks have become increasingly sophisticated and difficult to mitigate.
He said, developments over the past six months have potentially increased global financial stability risks and it goes on to say that risks have now shifted from advanced economies to emerging economies, from banks to shadow banks and from solvency to liquidity risks.
“Because risks have no borders, the messages from the GFR are a reminder to us, the supervisors and the regulators in the region, to become more vigilant in our regulatory and supervisory roles; and to foster a deeper regional cooperation in terms of supervision networking based on mutual sharing of experiences, norms and standards among AFSPC jurisdictions in order to counter these impending threats,” he added.
He said financial crises are inevitable as cyclical instability has become a permanent feature of financial markets.
“There is a saying that goes like this and I quote “even the best juggler sometimes drops a ball, and even the best singer sometimes misses a note”. In the same vein, even the well-managed and well-regulated financial systems will sometimes experience problems and crisis.
However, as regulators and supervisors in the AFSPC region, though crisis may be inevitable, this does not mean that we have to become hopeless or become light touch regulators.
“We have to constantly remind ourselves that crises are partially predictable and, therefore, are partially avoidable and manageable.
“I believe that, as a group of regulators and supervisors, we are here to once again reinforce that notion as we discuss and share ideas on strategies and tactics to avert and minimise crises in our region,” he said.
By CHARLES KADAMANA