a safer financial sector and with long - bis central bankers ’ speeches term effects on their lending capacity. overall, banks will become more selective in their credit decisions and will adjust their business models accordingly. the european commission proposal unveiled last february to establish a capital markets union ( cmu ) by 2019 has among its primary objectives the lowering of barriers to accessing equity and bond markets. obstacles are particularly severe in the case of small - and medium - sized enterprises aiming at raising risk capital. this objective implies that particular attention should be given to the complementarities between bank financing and market financing, rather than considering the two as obvious alternatives. and such complementarities are indeed numerous, both at a macro and a micro level. at a macro level, the cmu must be seen as a natural complement to the banking union in providing macro - financial stability. at the risk of oversimplifying, we may say that the latter addresses the sovereign - bank negative feedback loop that epitomized the euro area crisis while the cmu contributes to tackling another potential circle that can be at least equally vicious : the firm - bank loop, whereby the funding difficulties of banks – or, even worse, pressures to deleverage – translate into more costly or less financing for creditworthy firms ; in the reverse situation, when firms face problems in servicing bank credit, non - performing loans increase, weakening banks ’ balance sheets and impairing their lending capacity. at a micro level, the cmu can complement the banking sector in fostering innovation while also strengthening firms ’ financial structures. research has long documented the fact that, among external sources, equity financing is best suited to foster innovative activities, for a number of familiar reasons. start - up firms display stronger information asymmetries and have typically low or even no tangible assets to offer as collateral for bank loans ; furthermore, private equity or venture capital financiers foster innovation not only by providing capital but also managerial expertise and deeper knowledge of innovative sectors. there is evidence that equity financing spurs innovation also for italian firms. the benefits of broader capital markets also extend to those which in principle can be seen as competitors, i. e. banks. high quality securitization, one of the cmu ’ s short - term priorities, can free up banks ’ regulatory capital and increase their lending while allowing them to manage credit risks more efficiently. and broadening financing sources for smes can be beneficial not only for these firms but also for banks.

( fdi ), official development assistance ( oda ), and portfolio investment flows. closer home, kenya is the third largest recipient of remittances in sub - saharan africa, and it received us $ 4. 0 billion in 2022, an increase of 8. 3 percent compared to 2021, which represents over 3 percent of kenya's gdp. remittances have had massive impact on the lives and livelihoods of the recipients. take for example, esther from kenya, who worked in saudi arabia as a housekeeper for 7 years from 2012 to 2019. she was able to achieve 70 percent of her financial goals while in saudi arabia and at the same time managed to build a 2 - bedroom stone house in kabete, kenya, educate her 3 children and take care of her mother's as well 1 / 3 bis - central bankers'speeches as other relative's needs. kenya's digital landscape enabled her to achieve this by providing a platform for transactions ( m - pesa ) and for savings ( m - shwari ). esther is a return migrant and believes that she would have achieved 100 percent of her financial goals had she stayed longer. however, the cost of sending remittances remains high especially in certain corridors. according to the world bank's data, the cost of sending us $ 200 averaged between 5 percent and 10 percent worldwide, far exceeding the sustainable development goal ( sdg ) target of 3 percent. as a result of the high costs, remittance tickets remain sizeable. in the case of kenya, the adoption of technology and innovation has reduced costs allowing for smaller bite - sized remittance tickets. kenya's 2021 diaspora remittance survey revealed that 32 percent of remittances are through mobile money operators, due to the convenience, speed, and lower cost. still, a lot needs to be done to reduce costs towards the sdg target. remittances are used by recipients largely for daily expenditures, and not for investment and growth. the 2021 diaspora remittance survey revealed that the purchase of food and household goods, medical and education expenses, rent, and household utilities constituted 49 percent of remittances. this indicates that the huge reservoir of human and financial capital that represents the diaspora remains largely untapped. the diaspora should be an important bridge between the host and the home countries. for instance, india success story in the information technology ( it ) industry is anchored on the diaspora. india