MAS will, as part of its supervisory review process, continue to engage the banks on their capital planning processes, and to evaluate whether the framework is sufficiently robust and comprehensive. The third area that financial institutions need to do is to establish firm-wide risk management and foster an appropriate risk management culture. In this crisis, several institutions that failed were managing risks within “silos”, by organisational structure or by risk types. In terms of culture, the focus on expanding earnings needs to be matched with an equal focus on risk and control. Senior management and staff at the business lines need to comprehend, and be accountable, for the risks which emanate from their activities. Risk managers have to be empowered to call a stop to the dance even while the music is still playing. It is in this context that the recent Financial Stability Board principles on compensation have been formulated, to align compensation to prudent risk taking. So far, I have highlighted some of the challenges facing regulators and industry participants. Academics, researchers and institutes such as RMI, play important roles in supporting the financial industry in its journey to improve risk management practices. Let me now touch on the role that RMI can play. RMI’s role in the aftermath of the crisis As a knowledge centre in financial risk management, RMI acts as the link between theory and application, bringing together researchers, risk managers and regulators to share experiences and views on risk management. I believe RMI can do more to facilitate this.
This is seen as exploitation by the donor community of developing countries' need for investment, aid and debt relief, to create conditions that will facilitate their infiltration by globalised financial interests. The following statement in the July 2004 issue of South Bulletin is typical of this perspective: “Whence this striking paradox, inherent in good governance, of calls going out from the international organisations to national governments that these latter adopt, indeed “appropriate”, neo-liberal economic policies imposed from without while the globalised financial markets dispossess them of their sovereignty and insinuate themselves into the countries' ownership structure of capital”. 4  BIS Review 109/2007  The controversy continues on the link between governance and development, and while its proponents claim strong empirical evidence for it, there is strong assertion of the contrary, or at least agnostic, view in other quarters. It would seem that the jury is still out on this debate. Aspects of governance in Sierra Leone The principal donor institutions in Sierra Leone, as in most developing countries, are the World Bank, and the IMF. Donor support programmes coordinated by the World Bank are provided within the framework of the Bank’s Country Assistance Strategy and the Poverty Reduction Strategy Paper. Following implementation of an Interim Poverty Reduction Strategy Paper, the Bank approved a full Poverty Reduction Strategy Paper for Sierra Leone in February 2005, covering the period 2006 – 2009. The major instrumentality for Fund assistance to Sierra Leone is the Poverty Reduction and Growth Facility (PRGF).