to move at a measured pace, taking into account the resilience of public infrastructure and other development needs, in transitioning from brick and mortar banking branches to e - channels. there is anecdotal evidence which suggests, for various reasons, such as, cultural, literacy and human psychology factors, that customers, even in this digital age, need physical access and engagement with a human being and not “ siri ” to access financial services, to understand and resolve account queries. i am well aware and commend financial institutions engaged in various financial literacy programmes that also reach out to school going children, in the form of booklets, drama and radio quizzes on financial products and services. in this regard, it is equally important to engage customers on ways and means for optimising the benefits of digital and electronic platforms, but also highlighting the associated risks and mitigation measures. it is worth mentioning that banks need to practice, at all times, acceptable market conduct through increased transparency, fair pricing, quick and timely resolution of both failed transactions and fraud incidents. distinguished guests, in line with the 2012 - 2016 financial sector development strategy, a number of initiatives are underway to enhance cost - effective access to finance, including the establishment of a robust and effective credit information system as well as promulgation of electronic payments services regulations. also, as announced by the minister of finance and economic development in the 2015 budget speech, government has adopted making access possible approaches to financial inclusion. this is a multi - country initiative to support financial inclusion using a process of evidence - based country diagnostic and stakeholder dialogue. some of the making access possible priorities include, improving the payments eco - system, both domestic and crossborder transactions, facilitating low cost, accessible savings products through the use of mobile savings accounts and less onerous know your customer requirements for low risk savings accounts. i will now address financial regulation as a perceived barrier to financial inclusion. distinguished guests, the domestic regulatory framework is gradually being modernised to keep pace with financial innovation. i must admit that, given the dynamic, evolving and innovative financial sector, it is always going to be a challenge to come with smart and cost - effective regulations. this challenge is even greater for digital finance, which is currently and prospectively, the main conduit of the financial inclusion, especially in a sparsely populated country like botswana. it is generally accepted that rigid and excessive regulation can be an obstacle to financial inclusion. therefore, the bank and other domestic

pentti hakkarainen : capital - based macro - prudential instruments what type of policy tools are needed to address macro - prudential risks in the banking sector? notes by mr pentti hakkarainen, deputy governor of the bank of finland, for the panel discussion on " capital - based macro - prudential instruments - what type of policy tools are needed to address macro - prudential risks in the banking sector? ", eu commission's public hearing on the review of the eu macro - prudential framework. brussels, 7 november 2016. * * * thank you for your invitation to speak here today in front of this distinguished audience. this review of the eu macroprudential framework is very essential work for the european union. in my opening remark, i would like to share with you two points on capital - based macroprudential instruments, based on our own policy making experiences : first, effects of the said instruments are uncertain and second, processes for their usage are unnecessary complicated. these points are intertwined. let me start by saying that macroprudential policy is needed addition to other economic policies. it is very important that authorities have also macroprudential instruments available. we experienced in finland in the early 1990 ’ s a severe boom and bust cycle, at a time when we did not have any such tools. now, after the great financial crisis, we have instruments and framework in place. my comments today should be perceived as suggestions for improvements only and not criticism of the framework and instruments. we have several capital - based instruments available via crr / crdiv, but in practice we have found it difficult to find an “ appropriate ” instrument to mitigate systemic risks related to residential real estate and household indebtedness. some countries are already trying to curb acceleration of growth in prices and indebtedness, while we in finland have been more troubled with existing levels of indebtedness and muted macroeconomic outlook. when banks are well - capitalized and hold voluntary buffers well above regulatory capital requirements, broad based additional capital requirements, as macroprudential tools, are less effective and more targeted measures would be more appropriate, in my view. banks with high capital buffers have no need to respond to these macroprudential policy actions, and therefore the impact may either be marginal or different than what was aimed at. i am not sure whether the differences in banking structures and their solvency metrics were