##ing higher levels of savings to support higher investment rates ; iii. greater efficiency in the delivery of financial services to ensure that the cost of mobilising resources and allocating these resources becomes increasingly affordable and that the range and quality of services better caters to the needs of both savers and investors ; iv. enhanced stability in the system to ensure that all banks and other deposit - taking financial institutions can safely handle the public ’ s savings and ensure that the bis central bankers ’ speeches chances of a financial crisis – with all the costs that this would imply – are kept to a minimum ; and v. to make kenya one of the ranked financial centres in “ emerging markets ” by 2030. ladies and gentlemen : in the first five years of vision 2030, 2008 – 2013, the major reforms and initiatives undertaken in the financial sector to enhance financial stability, efficiency and access include : • licensing of deposit taking microfinance banks ; • introduction of agency banking to increase reach with least cost ; • automation of bond trading and lengthening the maturity of treasury bonds to 30 years ; • development of a capital markets master plan to chart the development of kenya ’ s securities markets for 10 years ; • introduction of credit information sharing and licensing of two credit reference bureaus ; • introduction of bancassurance products ; • enactment of the proceeds of crime and anti - money laundering act in 2009 and the establishment of the anti - money laundering board in june 2011 ; • the development of a regulatory framework for deposit taking savings and credit cooperatives ( saccos ) ; and • strengthened oversight of the insurance sector following the adoption of risk based supervision by the insurance regulatory authority ( ira ). ladies and gentlemen : the financial sector has started to register significant achievements out of the outlined reforms and initiatives among others. allow me to briefly mention some of these achievements. the contribution of the financial services sector to kenya ’ s economic growth has been on an upward trend from 3. 7 % of gdp in 2009 to 9. 2 % of gdp in 2013. over the same period, the sector grew faster than the economy. the financial sector grew by 9. 3 % in 2013 as compared to the economy which grew by 5. 7 %. this was an improvement from 4. 9 % growth by the sector in 2008 compared to the gdp growth of 0. 2 %. as a result, the financial services sector is one of the main drivers of kenya ’ s economic growth. the national financial access surveys conducted in 2006, 2009 and

institutional setups. there isn ’ t a one - size - fits - all sort of recipe for implementing a more responsible economic policy. in the paper, the role played by monetary, fiscal and wage policies seems to be rather underestimated. in my view, the contribution of better and sounder policies to explain the trend of domestic inflation in both industrial countries ( ics ) and emerging markets economies ( emes ) over the last 20 years has been crucial. the empirical literature has provided vast evidence, particularly for the united sates, that changes in policy objectives and management have been important to explain the decline of inflation since mid 80 ’ s. in developing countries, where fiscal imbalances were a main source of monetary instability and inflation, improvements in tax and expenditure policies contributed significantly to explain the decline of inflation since the early 90 ’ s. - bill also mentions that it is strange for inflation to remain so low given that monetary conditions seem to have been particularly lax for a rather long period of time. this is a true puzzle. however, considering the recent trend in certain variables related to the opportunity cost of keeping money, as well as the high global growth in the past years. we cannot rule out that, in real terms, the demand for money has genuinely increased. conclusive evidence to make this point is hard to find yet. further research on the subject should add some light on this issue. - white remarks the low cost of buying protection against corporate bankruptcies until the outbreak of the august crisis. he compares the cost as of mid july 2007 with the cost in the recessions of 1981 and 1991. however, the comparison is not totally valid because the depth and liquidity of the cds market in 2007 was enormously higher than in 1981 and 1991. - let me emphasize though, that financial integration should be given a larger role in the discussion between globalization and inflation. in particular, when assessing the effectiveness, credibility and commitment of monetary policy in emerging market to deal with inflation and inflation expectations. in my opinion, the depth of the financial system and its integration with capital markets has a powerful disciplinary effect on monetary policy as it reduces incentives to pursue expansionary policies as foreign capital would flow out to other markets with more predictable returns. also, financial development allows agents to substitute assets in local currency to protect themselves against inflation, restraining again the discretionary use of monetary policy. moreover, financial integration allows financing current accounts deficits, weakening the link between domestic output and demand. then, an