was inspiring to hear the successes of financial institutions in digitizing the operations of smes. this has indeed accelerated during the pandemic as smes have pivoted their operations to adopt to covid - 19 containment measures. to address the cash flow constraints that smes have faced due to covid - 19 restrictions, banks have restructured their loans to see them through this turbulent times. equally inspiring is the move by financial institutions and technology players to build the skills of smes by automating and training them on financial management. it will take finance plus which is access to finance and upskilling smes to restore them to drive growth and resilience post covid - 19. a lot more remains to be done in restoring smes but the green shots are sprouting and we need to nurture them carefully. second, on partnerships and collaborations, the key message was the need for increased collaboration in building a sustainable financial ecosystem. this approach leverages on expertise, resources and innovations from various players. central to this is the building of the requisite infrastructure to connect our citizens to the digital realm. significant resources and input will be required both from the public and private sectors to put together the requisite hardware and software for sustainable digital ecosystems. it was inspiring to hear from mas on the global initiative to build foundational digital infrastructure drawing on the experience of singapore, india and other global leaders. collaborations such as these will enable countries learn from each other and fast track the development of foundational infrastructure in their countries without reinventing the wheel. third, on sustainable finance, the pandemic has brought home the inter - dependence of corporations and the communities they operate in. together corporations and communities have worked together to mitigate the adverse impact of the pandemic. illuminating experiences were pointed out where banks and other entities worked with their customers through this period through restructuring of loans and continued provision of services through digital platforms. more encouraging as we build back better were cases where banks and other entities worked with manufacturers and smes to pivot their operations to the new normal. this was particularly pertinent in the move towards domestic manufacture of personal protective equipment ( ppe ) which initially were sourced from overseas. as we build back better, sustainable finance will be imperative. in the long run, our vision at the cbk is that all finance will be green. we are working closely with the kenyan banking sector whose leaders shared their experiences in this area. green finance is particularly pertinent

- performing loans. this is ultimately all about, in particular, giving banks greater incentive to be more risk - aware in their decision - making processes than they were prior to the outbreak of the crisis. for that to work, it has to be ensured that institutions with riskier business models also pay higher risk premiums. this, however, also requires investors to be correspondingly aware of risk in their own actions. and a decisive factor here is that banks, in a pinch, need to be permitted to fail – without bringing the financial system to its knees – and that investors and creditors, and not the tax payer, need to 3 / 9 bis central bankers'speeches be first in line to pick up the tab for banks ’ losses. these factors are what make the new european rules for bank resolution, and their rigorous application, so important. amidst all the contentious debate, recent events have shown, at least, that banks are now able to exit the market without jeopardising the functional viability of the financial system. but in order not to thwart these rules, the eurosystem has to return, over the long term, to a way of providing liquidity that is more in line with market conditions. the pre - crisis monetary policy framework had some merits in that respect. banks obtained liquidity from the eurosystem on terms that were not significantly more favourable than those on the interbank market. if central bank loans, which are not priced according to the credit institutions ’ financial standing, are significantly more favourable than funding via the money market, the banks will have few incentives to lower their risk premiums by means of an appropriate risk management. that also applies to longer - term refinancing operations. interest rates for longer - term refinancing not being set by the market weakens banks ’ inherent responsibility for their own liquidity and credit risk management. furthermore, it distorts competition because institutions that do not have a sustainable business model can obtain funding from the eurosystem over the long term irrespective of the risk involved – and do so, moreover, with collateral of lower quality than collateral on the interbank market. 3. government bond purchases ladies and gentlemen in the crisis, not only did the eurosystem switch to full allotment of liquidity as well as expanding the collateral framework, it also launched purchase programmes for government bonds. as early as may 2010, greek sovereign bonds were being purchased under the securities markets programme. to