Countries have not leant enough from crises - Governor

Ramani KANGARAARACHCHI

Search for responses in a wise manner to deal with the next shock to economic stability, Central Bank Governor Ajith Nivard Cabraal said.

Ajith Nivard Cabraal

Speaking at the seventh South East Asian Central Banks (SEACEN) public- private dialogue for the Asia Pacific Region held in Colombo yesterday, Governor Cabraal said countries should first examine issues based on first principle and look at responses in economic sense to develop confidence.

“When confidence diminishes it is very difficult to form norms and regulations,” he said.

He said that critical lessons are evading countries as they have not learnt enough from the crisis.

Therefore it is vital to get to the bottom of the issue. Long-term solutions are better as short-term solutions make things worse sometimes. He said that stability is a long-term process in what countries do over a period of time. Therefore it has to be a long-term stable plan.

He stressed that it is extremely difficult to deal with issues when fundamentals go out. Then the cracks have to be looked at early innovatively and decisively. He said there are emerging challenges such as micro financial risks within the economy therefore building up space diligently is vital.

“We have built a new buffer for everything and that could be utilized. Every shock comes with tension and the buffer is there to support,” he said.