•  Neither macroeconomic nor sector imbalances, of which I have spoke before, must be tolerated for too long. •  The banks' risk management processes and procedures must be dramatically improved. This includes revision of the existing limits on the  BIS Review 18/2009  banks' exposure to certain risks, improvement of the stress-testing procedures and elimination of the weaknesses related to risk management which arise from the investments in structural financial products. We, as National Bank of the Republic of Macedonia, have adopted new regulations related to these issues and we continue to work on that with our banks. •  Strengthening of the principles for liquidity risk management, especially in crisis. Internationally, steps have already been undertaken. In April 2008, FFS prepared a Report and defined 67 activities for strengthening the markets and the resilience of the institutions. The Report pays special attention to liquidity, and on September 28, the Basel Committee on Banking Supervision announced the new Principles for Sound Liquidity Risk Management and Supervision. The responsibility is located with the banks and supervisors. We, as National Bank, have already passed new regulations for defining the main elements which the liquidity risk management system of each bank must incorporate. The aim is to ensure level of liquidity which the banks will be able to use as source for covering. •  The transparency of the operations of the financial institutions must increase through the type and the scope of the data these institutions will disclose.
Both individually and all together we are absorbers of the shocks coming from the rest of the world, and that rest of the world is 98.75% of the world population (we are only 1.25%); 98.57% of the foreign trade, 98.73% of GDP in 2007. Therefore it is important for us to penetrate as close as possible to the nature of the current financial crisis, to the necessary and true answers to the question how it should be managed, which are primarily sought and ought to be found by the developed countries, what lessons are to be drawn from this crisis, what will be the damage for the region, what is the best way to cushion part of the inevitable impact as successfully as possible. What has actually happened? Starting from August 2007, the world was lapped by an intensive financial disorder, turmoil. Once again the trigger was pulled with a severe downward turn in the USA. First, "Fannie Mac" and "Freddie Mac" were taken into conservatorship. The following weekend "Lehman Brothers" turned out to be incapable of finding a buyer and they went bankrupt. This shocked the market, which expected that it will be saved by the government, as it was the case with  BIS Review 18/2009  1  "Bear Stearns" in the beginning of the year. Then, "AIG" had to be rescued after the rumors about the size of its losses incurred by agreements for commercial debt securities. Hence, the pressures increased enormously for the other dealers in securities.