Mar 24, 2010 (LBO) – Sri Lankan businesses should be prepared for economic downturns and watch for warning signs from other economies to avoid being hurt during crises, Central Bank governor Nivard Cabraal said. “The first lesson is, strengthen yourself in good times,” he said, recalling how the central bank prepared to face the global economic crisis and minimise the shock to the country.
The central bank acted early to prepare banks “by providing them some space which helped prepare themselves; when the storm came, they were ready,” he said.
The regulator brought in a one percent provision following the example of the Indian regulator despite criticism from the corporate sector.
“But that was what saved the banks. The banks were saved when problems hit the banks,” Cabraal told a forum organised by the Federation of Chamber of Commerce and Industry on lessons learnt from the global crisis.
“So you prepare yourselves before the crisis comes to you and you also got to practise some of your initiatives that you put in to motion when you get in to trouble.”
Keeping an eye open about what is happening elsewhere in the world keeps businesses from collapsing and helps in good decision-making d