the relative success that mauritius has achieved in economic and social development rests on the solid bedrock of regular public / private dialogue. at the core of this is the dialogue between the bank and the ceo ’ s of all banks in mauritius – which is unmatched in its regularity, its frequency and its intensity – which has helped us enormously to shield our small open and vulnerable economy from the crisis. the award is thus a tribute to the collective contribution of the government, the central bank, the banking industry, and the mauritian private sector. i would like to think of this distinction as a celebration of the progress of my country towards economic and social salvation. the crisis throws up new and unexpected problems around the world everyday : uncertainty persists in financial markets ; spillovers on the real economy leave in their wake negative sentiment, poor growth and tenacious unemployment levels ; fiscal and debt sustainability concerns cause serious apprehension ; and reduced incomes depress consumption and investment levels. amidst such global mayhem, our resource - constrained country surprisingly fared quite well. we have posted positive growth rates throughout the crisis, averaging 4 per cent per year or not far below trend levels. unemployment is at 8 per cent, a far cry from the rising joblessness in some of our major markets. inflation has come down. reserves have gone up. our banks are solid and well - capitalised. i can be forgiven for believing that smallness is no longer a liability. quite the contrary : it can be a source of added adaptive advantage. it gives our policymakers a quick - response capacity and the flexibility to change gear quite rapidly to adapt to the constantly - changing environment that has become the new normal. and this is what has so far spared mauritius from the worst effects of the crisis. my five years as governor coincide almost perfectly with the run of the crisis. as can be expected, they have certainly not been de tout repos. i initiated the practice of issuing an annual letter to stakeholders, where i highlight the activities of the central bank during the past year. i titled my last letter, issued two weeks ago, “ pummeled, hammered, buffeted … but still on course! ”. i was referring to the economy, but the title may also serve as a short - hand description of my own tenure as governor. pummeled, hammered, buffeted, i may have been but, through thick and thin, i have kept my eyes firmly focused on the best interest of the nation as i

regulator and regulatee bond has thus been nurtured. however strong our bond is, our relationship is not an easy one to manage. our perspective does not necessarily converge at all times. tension arises between us from time and time. there are times when the regulator takes measures that banks may believe to be wrong or misconceived. we understand your fears that the proposed regulations may be too complex, inappropriate in geographical scope, or not conducive to level playing fields. we, as regulator, may not only see strong regulatory measures as the prerequisites for banks to do business, stay in business and thrive in business, but essential for the stability of the financial system as a whole. sometimes, banks may decide not to challenge or criticise existing or new regulatory requirements in order not to upset the regulator – of this also we are aware. but it is important that you understand that criticisms of regulations which you believe are going to impact the sector, are wholly welcome as part of the constructive dialogue to get regulation right. nonetheless, together we have been able to take forward the banking sector. the banking industry in mauritius has traversed a long way to assume its present stature. governor gary stern of the federal reserve bank of minneapolis at the international conference on russian banking, 1994. bis central bankers ’ speeches following the biggest financial tremor in the history of banking in mauritius in 2003, many efforts have been made by banks to step up their internal control systems. despite all care and diligence, banks are not totally shielded from fraud risks or financial crimes. recently the banking sector has been shaken again out of its comfort zone. it was not a moment of glory for bankers and the central bank to realize that they have been outwitted by scammers using the loop holes in the regulatory framework. as of date, the total amount reported at our help desk has crossed rs769 million, with 2, 031 victims and if you take into account those who did not come forward, the total amount of the scam may be estimated as being quite close to the billion. it was certainly not flattering to any of you to learn that a number of your bankers may have fallen prey to the ponzi schemes – we cannot put this on their financial illiteracy, can we? it is rather a worrisome fact. it is my duty as regulator to remind you of the importance of stepping up your compliance functions to protect your institutions from being used as condu