of uganda as a result of its insolvency. the governor ’ s decision to resolve uganda commercial bank by selling it to a reputable international bank, in the teeth of widespread scepticism and in some cases outright opposition, proved to be one of the most prescient ever taken in the history of banking in this country. ucb was sold to stanbic bank, a sale which preserved the nationwide branch network of ucb, and protected its deposits. since acquiring ucb, stanbic has been in the forefront of the dynamic expansion of the ugandan banking system which has occurred in the 2000s, which has included very rapid growth of bank lending to the private sector. the governor also spearheaded major legislative reforms to financial regulation which were essential to strengthen the legal framework governing the financial sector in uganda. the 2003 micro - finance deposit taking act brought, for the first time in uganda, deposit taking microfinance institutions under the regulatory aegis of the bank of uganda. in the following year, the financial institutions act was enacted, which upgraded banking legislation in uganda and incorporated important elements of international best practise, such as prompt corrective action provisions for resolving distressed banks. the success of financial regulation in uganda over the last decade is indisputable. despite the shocks emanating from the global financial crisis, uganda ’ s banking system has remained in a markedly robust financial condition, with average capital adequacy levels comfortably in excess of statutory minimum levels, low levels of non performing loans and impressive profitability. prof. tumusiime - mutebile was recently appointed to a third five year term as governor. the bank will face new challenges in the years ahead. the emergence of uganda as a “ frontier market ” will make effective financial regulation, including macro - prudential regulation, even more critical to the stability of our economy. we must upgrade our monetary policy framework to embrace inflation targeting. and we must prepare the bank for the transition to east african monetary union. we should not be afraid of these challenges, for we are led by a governor of unique vision, courage and wisdom. mr. governor, please accept this plaque from the board and staff of bank of uganda in recognition of your exemplary stewardship of this institution. you can count on our support. we wish success in your new term.

: entry of nordic banks of course this high degree of integration has been achieved over time. in the baltic countries, today's level of economic and financial development was a distant dream as recently as 10 years ago. the fall in gdp bottomed out in mid - 1990s. the following years have brought rapid output growth. in estonia, for example, the level of real gdp has more than doubled. ( a side remark : output growth in the nordic countries has also been robust in the past 10 to 15 years. swedish gdp, for example, has doubled. such pace of development is likely to have contributed to the growth in the baltic countries. ) coming back to the baltics, 1997 and 1998 were the years of the asian and russian crises. in the baltic states, these crises led to the collapse of the stock markets, bankruptcies of many companies, including banks, and a surge in interest rates and unemployment. thus it was a good time to make cheap acquisitions in many industries, including baltic banks. that said, strategic entry of nordic banks was at the time of critical importance to restore market confidence. seb and swedbank acquired minority shares in two largest estonian banks, and started to increase their control. in the year 2000, sampo bank followed. indeed, the presence of foreign banks in emerging markets has generally been found to increase stability, efficiency, and governance. combined with improved regulation, strong nordic banks have brought a qualitative change in the baltic financial sector. as a result, we can proudly say that the estonian financial system stands out in the eu for integration, e - banking, and credit conditions, to name a few. nordic investment in estonian banking sector has proven profitable : roe has been around 20 percent. furthermore, local know - how helped the nordic parent banks to enter the latvian and lithuanian as well as the russian markets. effects of eu accession the eu accession has led to even better market access for local producers and has given estonia as well as the other new member states a kind of " seal of quality " as an investment destination. already the prospect of the eu accession enhanced these countries'credibility in the eyes of investors. but since the accession, the inflow of funds has been especially strong, as economic situation in the euro area was combined with higher global liquidity. furthermore, the geography of investors has broadened. the prospect of adopting the euro in a relatively near future has lowered interest margins in several of the new member states including estonia and has given