The decades long conflict which sapped our combined energies in various ways, is finally behind us. Therefore, it is now time for all of us to get together and rebuild our nation, in particular, the areas that have suffered. We, on our part, are keen to assist the people of the North to resume normal lives as soon as possible. Towards that outcome, we believe the Diaspora too could play an active role and become partners in the development process of the North. They can be an important influence to accelerate investments to these areas and thereby support the expansion of industrial activity and tourism. Needless to say economic opportunities in the North are expanding day by day, and I would like to urge overseas Sri Lankans to take an early look at emerging investment opportunities in these areas, particularly in the fields of IT, education and real estate development where they can surely and effectively contribute. 2  BIS Review 16/2010  I would also urge the Chambers of Commerce and Industries, and other similar Associations to consider establishing international institutional frameworks and links, which would pave the way for two-way interaction between the overseas Sri Lankan community and our local institutions and businesses. Such relationships could then act as focal points to promote remittances and investments into the domestic economy, as well. My dear friends, today, we meet in the midst of a significant change in our country’s economic and political landscape.
For it to be credible, we need commitment on sound backstops as a fall-back option for fulfilling capital needs. In Japan, such a close inspection of bank balance sheets was carried out in 2002. It proved to be an important step to recognising losses and cleaning balance sheets to eventually set off a gradual recovery with credit expansion in Japan. Second, one of the objectives of a European banking union is to delink banks from their sovereigns. That also implies that bank funding costs will depend on the quality of banks’ assets, and not on the location of their headquarters. Achieving this would mark a milestone in that it would establish a single capital market throughout Europe that companies can tap into. A single capital market, in turn, provides better financing for companies and eases productive investment, which will revitalise the European economies. Ultimately, it will be decisive in ensuring that Europe avoids a repeat of Japan’s “lost decade”, during which zombie banks poorly allocated financing across firms. Third, orderly deleveraging in the euro area also requires that the restructuring and resolution of individual banks will not endanger financial stability or put public finances at risk. For this, the institutional framework needs to be solid. This is the rationale  10  Entries of business establishments declined from their peak of 7.4% in 1988 and have not exceeded 5.0% since then, whereas exit rates remained at subdued levels of 2.5–4.0% between 1988 and 2000 and have increased to above 4.0% since then.