As well, the ability of many accountants to hide a substantial volume of very large transactions “off the balance sheet”, contributed to the demise of many of these large financial institutions. I mention this to highlight the critical roles that Accountants can play in maintaining financial stability in national economies and thereby the global economy as a whole. The stable economic environment that Samoa has enjoyed over the past many years is also partly due to the responsible way that the members of the Samoa Institute of Accountants have carried out their duties. And, I commend and thank you all for that. Let me now say something about our economy, interest rates and a bit about the Central Bank’s expanded mandate. 2. Economic update for the first seven months of 2009/10 and outlook for the remaining five months  Mainly, as a result of the Global Financial Crisis, the Samoan economy declined by close to 5 percent in the last financial year which ended in June, 2009. So, as we tried to get our economy out of recession, through the introduction of expansionary fiscal and monetary policies, the country was struck by the devastating tsunami in September. In the event, Government and private sector resources were diverted for the rehabilitation and reconstruction of tsunami affected infrastructure and other sectors, and thus putting on hold (albeit temporarily) a number of developments identified in the 2009/2010 budget.
And, in line with this objective, foreign investments abroad by residents have been discouraged, to ensure that there are sufficient funds available for domestic investments. This stance of monetary policy will be reviewed when Government’s Budget for 2010/11 is finalized in June this year. Now let me say something briefly about interest rates. BIS Review 49/2010  3  4. Interest rates and bank fees  Ladies and Gentlemen, in the past twelve months or so, there has been much criticism by the private sector and the public at large of our relatively high interest rate environment. This debate has been ongoing since the outbreak of the global recession two years ago. Reflecting the continued easing of monetary policy, the Central Bank’s official interest rates have declined steeply to record low levels. Consequently, the commercial banks’ deposit rates have also fallen sharply. In the event, the commercial banks’ weighted average lending rate has declined to 10.7 percent in January this year, from 12.5 percent in March 2008. The commercial banks have undertaken to effect further reductions in their lending rates in the near future. These further reductions reflect the maturity of several long term wholesale deposits which have been reinvested at lower rates. In the medium to long term, the Central Bank is aiming at reducing the interest rates in Samoa, to be closer to those of our major trading partners (such as Fiji).