de l ’ annee ” – the “ controversial ” man of the year. this was followed by deafening cries from various quarters that the governor of the central bank had made abusive use of his powers. ironically, the year ended on an altogether different note, with a newspaper headlining “ super bheenick ”, and claiming that the governor was set to become a super governor with wide - ranging powers. such statements were prompted by some measures announced in the budget speech and by changes that the finance ( miscellaneous provisions ) act 2010 brought to the relevant banking and central bank legislation. i am sad to see that there has been a wrong reading of many of those measures in some quarters and this has distorted the debate somewhat. 52. the fact of the matter is that, with the amendments to the banking legislation and the measures announced in the budget speech, the bank has been endowed with additional bis central bankers ’ speeches responsibilities. the amendments to the bank of mauritius act 2004 are intended to give greater flexibility to the bank and give us the means to operate expeditiously. we want to develop the foreign exchange and derivatives market, which is part of our financial market development and financial deepening agenda. we already have operations on derivatives – the foreign currency swaps. we will be able to promote the development of the islamic money market and the issuance of sharia - compliant instruments, and instruments other than the bank of mauritius bills, for the management of liquidity in the market. the amendments to the act will also allow us to grant loans to non - financial institutions in emergency situations to minimise costs to both the final borrower and the taxpayer. that is the logic behind all these changes – to allow the central bank to operate more efficiently as well as preemptively. we may also be looking at a revamping of the financial regulatory landscape with the potential merger of the financial services commission and the bank of mauritius and we shall be guided by the expert advice of consultants in the field. 53. let me summarise about how we have fulfilled our mandate this year. on the inflation front, we achieved a signal success – we have witnessed historically - low rates of inflation in the past two years. our country has witnessed an annual pre - crisis growth rate of 5 percent on average – our biggest challenge would be to achieve higher growth rates. our banks are healthy, profitable and well - capitalised, and we are ready to move to basel iii. on the financial stability side, we do not

on 1 june 2010. with the coming into operation of this bank, there are now 19 banks operating in mauritius. 32. regulation and supervision we sharpened and streamlined our approach to the supervision of banks and other financial institutions falling under our purview and remained vigilant throughout 2010. we followed closely developments in international accounting and supervisory standards and issued new guidelines to the industry to ensure that our banking industry follows international best practices. 33. our onsite and offsite monitoring was strengthened further. we made our camel rating more dynamic and broad - based. in consultation with the banking sector, we finalised plans to make the camel rating of banks public as from q1 2011. given that many of our domestic banks are not rated, we take the view that the publication of the camel rating will help to plug a vital information gap. in this area also, we are taking an unconventional step – it is not common for such ratings to be placed in the public domain. i must compliment our bankers for their sagacity in agreeing to go along with us on this front. bis central bankers ’ speeches 34. the reforms undertaken by the basel committee on banking supervision ( bcbs ), which were agreed by the governors and heads of supervision and endorsed by the g20 leaders, culminated in the issue of new global regulatory standards, the basel iii framework. according to nout wellink, chairman of the bcbs, basel iii, which prescribes higher levels of capital adequacy and incorporates a global liquidity framework, will reduce significantly the probability and severity of banking crises in future, protect financial stability and promote sustainable economic growth. the overall capital adequacy ratio of our banks was around 16 per cent on average under basel ii – higher than the minimum required. we do not foresee any major problem for our banks to attain the revised capital adequacy requirements of basel iii. 35. islamic banking as indicated previously, we granted our first islamic banking licence in the mauritian jurisdiction in october 2009 which was a major step in translating the vision of the authorities to provide an alternative mode of financial intermediation, thus enhancing the options available to bank customers. we expect the bank to be operational by the end of q1 2011. 36. we have taken some decisive steps forward in our quest to make mauritius a centre of high quality sharia - compliant financial services. first, building on our membership of the islamic financial services board, we participated actively in the preparatory work and became