Financial architecture:

World needs new order

*Globally implemented economies in globally responsible way

*Global economic crisis taught us many lessons

President Mahinda Rajapaksa yesterday emphasized the need to build a new financial order and a model that would better equip world nations to face future economic crises.

In his inaugural address to the 46th South East Asian Central Bank (SEACEN) Governors’ Conference in Colombo yesterday the President said: “The global economic crisis taught us many lessons that varied across nations.

“All countries learnt both common and individual lessons, from this crisis, which left behind a trail of serious damage across nations and shook the very foundations of the financial structure of the world.

“It is therefore, clear that if we are to safeguard the world economy in the future, we would need to build a new financial order and a model that will better equip us to face crises of this nature”.

He also noted that it was essential for globally influential economies to act in a globally responsible manner.

“In this endeavour, much attention has been paid to regulate and supervise financial institutions which are considered to be “too big to fail.” “This is indeed commendable, since the fall of major global financial institutions damages the international financial structure in a permanent manner. By the same token, it is also necessary for the worldwide financial community to focus upon the management of economies that have a global impact, and therefore have become “too big to fail”.

In this context he noted that the theme of this year’s conference “Post-Global Financial Crisis: Issues and Challenges for Central Banks of Emerging Markets” was very relevant. “We all know that certain national economies are so large and wide, their financial well-being is vital for the global economic health.

In that context, it is essential that such globally influential economies should act in a globally responsible manner, so as to not place themselves and indeed others, with whom they have dealings, in danger” he added.

The President during his speech said that the SEACEN has become a highly influential group in the world economy and the recent entry of China it has further strengthened its reach and impact across the world.

The Central Bank of Sri Lanka hosts the 46th South East Asian Central Banks (SEACEN) Governors’ Conference and the 30th meeting of the SEACEN Board of Governors from February 25-26, 2011.

It is also considered as one of the main events to be held in conjunction with the Banks 60th Anniversary celebrations.

During yesterday’s inaugural ceremony Central Bank Governor Ajith Nivard Cabraal, National Bank of Cambodia Governor Dr Chea Chanto, International Monetary Fund (IMF) Deputy Managing Director Naoyuki Shinohara too addressed the gathering.

The SEACEN includes 17 members and the People’s Bank of China is the newest member. The other SEACEN members in addition to Sri Lanka are Brunei, Cambodia, Fiji, Indonesia, Korea, Malaysia, Mongolia, Myanmar, Nepal, Papua New Guinea, Philippines, Singapore, Chinese Taipei, Thailand, and Vietnam. Several Observer Bank representatives from other countries too would take part.