of responsibility, and in a good number of financial and non - financial businesses, disregarded these cardinal guiding principles of good corporate governance and conveniently forgot that what is legal is not necessarily ethical. in the end, the financial and economic structure could not bear the weight of accumulated lapses ; so, it collapsed. while all this is now water under the bridge, it has been recognised in some quarters that the international accounting standards contributed more than their fair share to the financial crisis. it is pointed out that one new standard abandoned the traditional prudent principle of historical asset valuation and replaced it with a highly subjective and pro - cyclical “ fair value ” concept. as a result, brokers, analysts and investment bankers abused the standard. the upward movement of stock prices immediately inflated balance sheets which, in turn, further inflated the asset price and, when the economic downturn set in, the bubble eventually burst. it was known that the paper profits resulting from inflated asset book values could not be realised ; and yet banks and other non - bank institutions took inordinate debt issuance risks. in addition, the “ fair - value ” principle was not much understood by the market, and was not transparent. in the event, balance sheets were hardly a useful basis for decision - making by economic agents. the far reaching economic and social consequences of this accounting practice are now a matter of record. distinguished ladies and gentlemen, it has been said that war is too serious a business to be left to the generals only. likewise, it is now widely recognised that accounting is too important a profession to be left to accountants only. indeed the united states of america and the european union recently took measures to “ soften ” or dilute, as it were, the deleterious effects of “ fair - value ” accounting practice in financial institutions. another emerging change is the call for more disclosures in accounting standards with which those of us outside the profession are grappling, obviously with the helping hand of accountants. long gone are the days when accountants confined themselves to the boring ivory tower of “ number crunching ” or, as at times pejoratively referred to, “ bean counting ”. in fact, it has been said that accounting has now entered a golden age ; an age of the changing role of the accountant ; an age of wide - ranging roles that include professional business advice, planning, reporting, identification of value drivers and risk mitigation. in particular, it is increasingly desirable that the

linah k mohohlo : promoting competitive, cost - effective banking in botswana keynote speech by ms linah k mohohlo, governor of the bank of botswana, at the official launch of capital bank lilmited gicc, gaborone, 28 may 2008. * * * i am most grateful to the board and management of capital bank for inviting me to be the guest speaker on the occasion of the launching of their bank in botswana. let me begin by recognising the presence of the governor of the reserve bank of malawi, mr victor mbewe, who has timed his visit to botswana to coincide with the official opening of capital bank. his welcome presence this evening is testimony to the regulatory and supervisory collaboration between the two sister central banks ; the reserve bank of malawi and the bank of botswana. capital bank limited ( capital bank ) is a subsidiary of first merchant bank of malawi, and was granted a commercial banking licence by the bank of botswana in december last year. at the time of licensing first merchant bank ( fmb ), which is headquartered and operating mainly in malawi owned 51 percent of the shares of capital bank. the remaining 49 percent of the shares are held by citizens of botswana, kenya and the united kingdom. one of the attractions of the bank ’ s application for a banking licence was the parent bank ’ s proven track record and strength in financing small and medium scale enterprises ( smes ). as you know smes play a major role in contributing to sustainable economic growth and poverty reduction. therefore, access to credit is crucial for their survival. based on the performance of the parent bank in malawi, it is my hope that capital bank will leverage on its experience and infrastructure in servicing this niche market in botswana, and in so doing, contribute to sustainable economic growth and job creation. i am further encouraged to learn that capital bank has expressed commitment to offer good quality service, accompanied by positive real interest rates on savings and competitively priced banking products. this suggests that the bank is fully aware that it will grow its business and prosper only when customers receive the standard and quality of service to which they are entitled. master of ceremonies : capital bank establishes its presence in botswana at a time when competition in the banking sector is intensifying. you will recall that in 2006, the market witnessed the entrance of a regional bank ; and hot on the heels of that bank, capital bank has come to being ; this brings the number of commercial banks operating in our country to