cut this process and build up ad hoc measures for purely prudential purposes will not succeed. it runs the risk of adding significant distortions and having unwanted consequences. in particular, if not carefully drafted, the leverage ratio could create incentives for banks to pile up riskier assets in their balance sheets, in order to maintain the same returns on equity with lower leverage. this would only aggravate the problems that regulation is trying to solve and precipitate the next crisis. this is why some scepticism is warranted as to the possibility of using the leverage ratio as a universally binding, or in the language of regulators, a " pillar one " component of the capital framework. consistency with macroeconomic policy regulatory reform has today to be implemented in a very uncertain macroeconomic environment. it is therefore important that we strike the right balance : efforts towards long term reform must not create, in the short run, additional downside risks to economic activity. since pittsburgh, we have a roadmap and we have deadlines. we must find the optimal sequencing to reconcile our ultimate objectives with the need not to impede the recovery. this is especially relevant for the capital regime. banks must have a much stronger capital base in the long run. but, in the short run, we expect credit to continue flowing to the economy and we want, therefore, to avoid any abrupt and disorderly deleveraging. we don't want, in short, the introduction of a new capital regime to have a procyclical effect on our economies. in the euro area, the economy depends on the banking system for more than two - thirds of its financing. any lasting disruption to credit flows would cause considerable harm. regulators could jointly decide on the following sequence. in the immediate future, priority should be given to capital conservation. as i mentioned, most of the current banking profits are, in fact, by - products of public policies and there is a good case for requesting that they should be kept inside the banking system and used to strengthen balance sheets and finance credit to the economy. this would require some restraint in dividend distribution and, of course, in the overall amount of variable compensation. in parallel, all possibilities to issue new equity should be exploited. this would be a first step. as a second step, a progressive schedule of capital strengthening could be precisely defined and published for the future. it would be crucial that this schedule be made explicitly contingent on the state of the world economy. again

official opening of botswana savings bank limited hukuntsi branch keynote speech by moses d pelaelo governor, bank of botswana november 30, 2020 salutations it is with great pleasure and honour for my delegation and i to be joining the hukuntsi community and the managing director of botswana savings bank ( bsb ) and his staff for the official opening of a branch here in hukuntsi. director of ceremonies, let me mention that i gladly accepted the invitation from the managing director, mr marumuloa, to perform the official opening because of the significance of this occasion to the people of this region, which extends beyond the narrow confines of a bank branch building. first, it is important to acknowledge that, save for the botswana postal services, this is the first permanent physical branch of any bank in hukuntsi and the surrounding matsha villages. hitherto, notwithstanding its population, geographic size, proximity to wildlife conservation areas, importance of cattle farming, as well hosting many government and subdistrict facilities, the entire kgalagadi north constituency had only one bank branch in kang and two atms providing financial services. therefore, the opening of this branch is expected to make a huge beneficial impact to the inhabitants of the area, many of whom have historically had little or no access to formal financial services. second, the opening of a bsb branch in this area within two weeks of that of the palapye one by the minister of finance and economic development, honourable dr thapelo matsheka, is a clear demonstration of commitment and forward - looking business strategy on the part of bsb towards expansion and provision of convenient access to banking services in towns and villages, while meeting commercial objectives. third, the development we are celebrating today is fully aligned and resonates well with the government strategy on financial inclusion. the strategy, making access possible, is designed in recognition that cost - effective access to financial services by all citizens is positive for financial sector development and inclusive economic growth. access to banking and financial services eases the ability to meaningfully pursue economic activities that are desirable for individual welfare enhancement, employment creation, raising living standards, and, hence, sustainable national economic development. as you would be aware, financial inclusion is part of the united nations sustainable development goals number 8 on decent work and economic growth. financial inclusion and value addition director of ceremonies, financial inclusion has, at a minimum, four elements, namely, access to a savings account, credit, insurance,