study ( is ) thesis in 1964, though i do not pretend that my effort was a cause of the breakdown of the bretton woods system. introductory observations " globalization " can mean many things, but tonight i mean it to refer to increased interdependence of national economies as reflected in greater and freer flows of goods, services, capital, and even labor across national borders. in recent years, world trade - - imports and exports - - has risen much faster than world income and production, and so has the flow of capital. no doubt the big players - - multinational corporations and " production groups " in an intricate chain of subcontracting - - have played a major role in this phenomenon. they have relocated production around the globe to more cost - efficient locations and prompted a worldwide expansion of trade in parts and semifinished goods as well as in final products. but increasingly, small businesses also are participating in global markets. when we hear the term " globalization, " we tend to think first of trade in physical goods, but among the most striking aspects of recent developments is the expansion of global trade in services and the closer integration of global financial markets. who has not had the experience of realizing that the person on the phone helping with a problem with software or a credit card lives in another country? indeed, arrangements are now available to academic researchers to outsource their routine statistical the views i express here are my own and not necessarily those of other members of the federal open market committee. alain chaboud, richard freeman, david reifschneider, and vincent reinhart, of the board's staff, contributed to these remarks. 1 / 7 work and other support to anonymous foreign research assistants via the internet, though i doubt this technique is an acceptable approach for your is project. the accelerated pace of globalization has reflected a number of key developments. rapidly changing technology has reduced the cost of transporting goods and services ; advances in computing and telecommunications have greatly facilitated the flow of information around the world. recognizing the benefits to their citizens from greater economic integration, governments have reduced barriers to trade and capital flows. they have done this bilaterally, among groups of countries, between economic blocs, and on a regional basis - - such as within the european community and in the north american free trade agreement in our own hemisphere. but we should not overlook the main drivers behind exploiting these opportunities - - ourselves. as consumers responding to lower prices and the greater availability of goods and

considerable progress has been made in licensing two dtms, the central bank is concerned at the slow uptake of this new avenue for microfinance institutions to be mainstreamed into the financial sector. we are therefore engaging the microfinance industry through its umbrella body the association of microfinance institutions ( amfi ). this engagement aims at identifying the bottlenecks for microfinance institutions some of which include : costs associated with roll out of branch networks and ict infrastructure. restructuring of shareholding of microfinance institutions to comply with shareholding restrictions specified in the microfinance act. the act restricts shareholding by an individual or entity to 25 % of the institution ’ s share capital. mfis are constituted in various forms including non governmental organisations and trusts. under the act, transforming mfis are required to be incorporated as limited liability companies registered under the companies act. the incorporation process takes considerable time and expense and may deter some mfis from applying for a dtm license. anecdotal evidence also seems to suggest a “ wait and see ” approach by a number of potential deposit taking mfis as they assess the experience and performance of the pioneer regulated dtms. the central bank would like to take upon itself the task of dislodging the “ waiting option ” from this sector of the market. the central bank of kenya is currently drawing up proposals for review of the microfinance legal and regulatory framework. i should stress that the bank will continue to consult with market players as this process moves forward. we therefore, look forward to drawing valuable lessons from this summit to enhance kenya ’ s microfinance legal and regulatory framework. we stand ready to advice, cultivate partnership and only regulate when rules are flouted. with these few remarks, ladies and gentlemen, it is now my honour to welcome the deputy prime minister and minister for finance, hon. uhuru kenyatta to make some remarks to this summit and to invite his excellency the president of the republic of kenya to officially open the africa - middle east microcredit summit. thank you.