- up capital of all the financial institutions regulated by state bank. the most sizeable deal of $ 513 million was struck by the standard chartered bank which acquired a mid - size strong local bank ( union bank ). this is being followed by others such as abn - amro, nib and citibank etc. that are contemplating acquisitions. this m & a wave will help further consolidate the banking sector. principally driven by high investor confidence and economic prospects, the current m & a wave is also triggered by the need for banks to meet higher capital requirements and also growing competition which will make it increasingly difficult for small banks to survive. together the growing trend of m & a and recent issue of gdr of mcb bank at the london stock exchange have attracted close to $ 1 billion inflows and another equivalent amount is yet to flow in. four microfinance banks ( khushali microfinance bank limited, first microfinance bank limited, tameer microfinance bank limited and pak oman microfinance bank limited ) are working at national level while two ( rozgar & network ) are operational at district level. d. sustainability of banking sector reforms prospects for the continued and sustainable banking sector growth are promising. what lends confidence to bankers that are fast expanding their stakes and interest in pakistan is the ( i ) high and sustainable economic growth that the country is set on ; real gdp in the past 2 years grew by 8. 6 % and 6. 6 % and is now set to register another 7 % growth ; ( ii ) real consumption expenditure is on the rise and leading the demand growth, boosted by doubling of per capita incomes to $ 850, a fourfold increase in remittances over few years, rising industrial capacities for consumer durables, automobiles, etc. and growing role of consumer financing and personal loans in meeting the demand for consumer goods ; ( iii ) in recent years, investment spending has gained substantial momentum and will be rising further as the government and private sector launch and implement large infrastructure projects. the government has plans to add 5000 mw new power capacities in private sector along with a number of hydel projects, highways and port infrastructure, while catering for the development of large urban infrastructure to upgrade large cities ; and ( iv ) foreign direct and portfolio flows is at an all time high and is expected to further grow given the economic potential and high returns on equity in both corporate and banking sectors. the scope for enhancement of banking business is phenomena

framework has already started delivering key results including broader coverage of central bank financial stability analysis and monitoring of systemic risks. furthermore, much work is done in closing data gaps and coming up with techniques to assess systemic risks and development of new macroprudential tools that have the capacity to identify systemic risk in a forward - looking way. the stress testing frameworks have also been redesigned by the regulators that incorporate extreme shocks ( tail risk ) to capture systemic risk and to identify the effects of macroeconomic vulnerabilities on individual institutions as well as on the overall financial system. however, the challenging task of building institutional and governance arrangements call for additional debate among policy makers. the post crisis reforms also stress the need to improve and bring uniformity in international accounting standards. in this regard, the international accounting standards board ( iasb ) and the financial accounting standards board ( fasb ) initiated a convergence project of their accounting standards and practices. the fsb made recommendations for converged accounting standards of iasb and fasb in four areas including lending activities, impairment of financial assets, addressing valuation uncertainty in fair value measurement guidance and offsetting / netting of financial instruments. accordingly, the iasb and the fasb are jointly developing a common impairment model to assess and record the impairment in the value of financial assets / instruments. both boards have also agreed to expand the scope of their joint project of financial instruments to address netting financial assets and liabilities on the statement of financial position. furthermore, disclosure requirements have also been revisited in the reforms agenda. much of the focus has been on improved disclosures on structured credit products, instruments and exposures taken in special purpose entities ( spes ), and on - and off - balance sheet items of banks. similarly, basel iii also improved its disclosure requirements for exposures in securitization, off - balance sheet exposures and exposures in asset - backed papers and mortgage - backed securities. in a recent survey organized by the fsb it was found that the disclosure recommendations have improved the disclosure practices in certain oecd countries. however, it is felt that the disclosure on spe securitization and exposure before and after hedging need certain improvements. the financial crisis resolution framework has also been revisited in the post - crisis period and its scope has been enhanced to an integrated crisis management and resolution framework. similarly, the fsb has put forward the principles for cross - border cooperation on crisis management that includes effective coordination amongst the national supervisory agencies, central banks and