of banks has not been so long as to suggest that the bank of mauritius has been ineffective as a regulatory authority of banks. the us controller of currency wrote a letter of guidance to banks way back in december 1863. three short lines in the letter give an idea as to why the five banks lost their banking licences. the lines read as follows : “ pursue a straightforward, upright, legitimate banking business. never be tempted by the prospect of large returns to do anything but what may be properly done under the national currency act. ‘ splendid financiering ’ is not legitimate banking, and ‘ splendid financiers ’ in banking are generally rascals or humbugs. ” bis central bankers ’ speeches in 1996, the bank of mauritius had revoked the banking licence of the mauritius cooperative central bank ltd ( mccb ). the mccb, as the bank was popularly known, suffered from serious capital deficiency. the bank had a scheme to attract deposits at the mind - boggling rates of interest of over 15 per cent. the rates were of course far higher than the then prevailing market rates. when the chicken had come to roost, the bank did not have liquidity. the bank ’ s shareholders and staff as well as informed depositors had started withdrawing funds. the bank barrelled towards failure and dashed around like a panicked headless chicken. the shareholders of the bank, representatives from the small - planters community and those personalities who were politically well connected clamoured for the bank of mauritius intervention. the then bank of mauritius was not yet independent. as per the bank of mauritius act 1971, the minister of finance was fully empowered to issue directives to the bank. reluctantly, the bank of mauritius had intervened by way of capital and liquidity injection. already, public trust in the bank was lost and irrecoverable. the death sentence of the bank was readable on the wall for quite some time. yet, the bank of mauritius was asked to revive a clinically dead bank. the bank of mauritius had yet to learn a fundamentally important lesson when dealing with banks in trouble : a troubled bank can survive without capital for some time. but without liquidity, that bank is bound to collapse within hours. no amount of liquidity injection by tax - payers would be sufficient to rescue such a troubled bank. once public confidence in a troubled bank is lost more so in a small gossip - ridden society like ours, it stays lost. this sad story and other equally

of the resilience and strength of our banking sector lies in our early adoption of specific basel iii measures. i look forward to continuing the implementation of the remaining basel iii measures and, accordingly, we have planned the roll out of a slew of regulatory upgrades including : 1. the introduction of the net stable funding ratio which will ensure that banks maintain a stable funding profile over the long term ; 2. the introduction of a leverage ratio as an additional measure to limit excessive leverage in the banking sector ; 2 / 3 bis - central bankers'speeches 3. the alignment of regulatory risk weights for credit, liquidity, market and operational risk exposures with basel iii ; and 4. improving our disclosure and reporting requirements which will also comprise climate - related disclosures. a three - day exposure might not be enough for you to master all the reforms but the journey must start somewhere. this is what we are doing today, together with you. while the bundesbank experts will be taking us through the contours of basel iii, i am confident that at the end of sessions, you will have a solid understanding of the main amendments required to our existing framework as well as the challenges ahead. this is why in addition to the early adoption of certain basel iii measures, i have since assuming governorship in 2020 ensured that the ongoing upgrade of the bank of mauritius'overall supervisory and risk management framework be targeted at the specificities of our own risk topography. in this respect, we are expediting the full implementation of our risk - based supervision framework which is an innovative supervisory toolkit and which provides us with a novel capacity to deep - dive into specific risk areas and even look for feedback loops at the financial stability level. it will blend particularly well with the risk - centric approach of basel iii. in particular, i have in mind the market risk module which is providing us with important insights during the current period of heightened interest and re - pricing risk. nevertheless, existing regulatory toolkit and planned upgrades have to be complemented by continuous skills training for our supervisors for them to be really effective. our supervisors are at the center - stage of our rapidly evolving banking sector and banking regulation and, perhaps, the pace of change we are witnessing here is far greater than in more mature jurisdictions. in this respect, we are particularly keen on ensuring that our supervisors have the required skills to keep abreast with latest developments through a combination of local and overseas training sessions. i would here encourage all banks to continuously