brian commettant : capacity building and stakeholder engagement for the fintech regulatory sandbox opening remarks by mr brian commettant, first deputy governor of the central bank of seychelles, at the eden bleu hotel, day two for external stakeholders, 12 october 2022. * * * governor who is joining us virtually, second deputy governor, mr eliki boletawa and team of facilitators from afi participants, good morning. i am pleased to welcome you to this stakeholder engagement and dissemination workshop on the fintech regulatory sandbox framework by the central bank of seychelles. today ’ s event, organised with the valuable assistance of the alliance for financial inclusion ( afi ), follows a one - day capacity - building session for cbs staff. the importance of technology is undeniable today, as evidenced by the ongoing covid19 pandemic, and there is no doubt that the increasing pace of digital transformation globally will continue. seychelles is no exception to this trend, where there is a renewed focus on modernising the economy - an endeavour which is synonymous with innovation. while the level of fintech in seychelles is still progressing, there is no mistaking the growing interest, in harnessing the possibilities. in the face of this reality, the regulatory and supervisory authorities have the vital role of putting the necessary framework in place to facilitate and support innovative ideas, while ensuring a balance between the opportunities presented by such innovations and the potential risks. it is for this reason that the cbs, with the assistance of afi, is engaging with its stakeholders on the upcoming implementation and operation of a regulatory sandbox framework. this is expected to provide a platform for financial service providers and fintech companies to live - test innovation in a controlled environment, thus contributing towards growing opportunities in the financial landscape. collaboration between sandbox participants will provide a two - way opportunity to disseminate and build knowledge around financial technology, and allow cbs to adopt a more informed regulatory approach. through this forum, you will be updated on the current digital financial services and fintech landscape in seychelles. you will also learn more about the proposed regulatory sandbox framework, and how it will work whilst also receiving insights on the implementation of such a framework by other countries. the implementation of a regulatory sandbox by cbs, stands to bring another approach to the exercise of its supervisory functions in relation to innovation - one from which we 1 / 2 bis - central bankers'speeches will learn to maximise its potential and address challenges as

of the global financial crisis on the domestic economy. the external position continues to be strong. as of end january, the country ’ s international reserves registered almost $ 40 billion, equivalent to six months ’ of imports of goods and service and three times external debt based on residual maturity. we are still projecting a surplus in the bop for this year, supported by steady remittances and bpo receipts as well as a lower import bill due to the significant decline in international oil prices. the banking system remains stable with very robust solvency. the industry ’ s capital adequacy ratio ( car ) as of end - june 2008 stood at 15. 3 percent. moreover, results of stress - testing done by the bsp showed that despite adverse shocks to asset quality and income, banks ’ car would still be well above both the international standard of 8 percent and the bsp ’ s minimum regulatory requirement of 10 percent. the banking system as a whole also remains very liquid. proof of this is that bank lending continues to post significant growth. as of end - november 2008, bank lending, inclusive of interbank loans, registered a year - on - year growth rate of 22. 9 percent. we expect some slowdown in credit expansion going forward as banks tighten credit standards. nevertheless, loan growth could still be at double - digit, if banks remain keen to spot lending opportunities. avoiding the negative feedback loop what do all those numbers and data mean? how do they fit into our daily lives? we all know there is a key link between a stable macroeconomy and a sound financial system. on one side of this link, we know that an efficiently functioning financial system is critical to the effective transmission of monetary policy and fuels economic activity and growth. on the other side of this, we know that a vibrant real economy encourages the further development of the financial system. in essence they “ feed ” on or reinforce each other. [ i leave the discussion of the direction of causation for another day! ] the numbers and data i walked you through show that both our macroeconomy and our financial system have remained sound and stable against the tide of the financial turmoil. but there is risk that if one of these weakens, perhaps due to further external stress, it could drag the other one with it. in other words, the feedback loop is negative. this is now occurring in the major economies – the financial turmoil has caused economic recession in the us, uk, europe, singapore