european banks still have robust fundamentals, including sound capital positions and liquidity buffers. levels of nonperforming loans are relatively low, although they have started to increase recently. thanks to their generally sound starting position, banks have been able to smoothly navigate the adverse macro - financial conditions seen since the end of the pandemic, such as increasing interest rates, geopolitical shocks and the banking sector turmoil in march 2023. meanwhile, on the monetary policy side, we have explicitly recognised the importance of safe and sound banks for our price stability mandate since july 2021, when we concluded our strategy review. specifically, we acknowledge that financial stability is a precondition for price stability. moreover, monitoring the transmission mechanism of 2 / 5 bis - central bankers'speeches monetary policy – including how banks pass on our policy decisions – is a key consideration when calibrating our monetary policy. we made this very clear in our communication since we started to tighten monetary policy. in addition to the inflation outlook and the dynamics of underlying inflation, assessing the strength of monetary policy transmission is a key element of our reaction function. the safety and soundness of banks has not only made them resilient to the unprecedented increase in policy rates, which went from - 0. 5 % in july 2022 to 4. 0 % in september 2023. it has also enabled them to pass on our policy rate increases in an effective and orderly fashion, ensuring that broader financing conditions evolved in line with our monetary policy intentions. having said that, pass - through would have even been stronger had there been tougher competition for deposits in member states. from last september up to last week, a period when we kept policy rates on hold, we saw a continued strong and effective transmission of monetary policy. by keeping broader financing conditions restrictive, monetary policy has made a major contribution to bringing inflation back down from high levels. that is why, at last week's meeting of the ecb's governing council, we considered it appropriate to moderate the degree of monetary policy restriction by lowering our key interest rates by 25 basis points. banks have proven resilient, and inflation is continuing its downward trend. you might therefore expect both sides of the ecb family to be generally content with the progress made in the pursuit of their objectives in the recent tumultuous years. but we are also a family that doesn't easily declare victory, is always on the alert, and we warn of complacency in view

bank population o • • introduced financial literacy programmes to develop inclusive financial system improve national payments system to enhance efficiency of payment system o introduction of new payments system, kina automated transfer systems ( kats ) – improve efficiency and safety of transactions ( real time settlement for high value payments, cheque truncation, direct credits ) o reduce incidence of fraudulent transactions anti - money laundering & countering financing of terrorism to reduce criminal use of financial system o establishment of a unit ( fasu ) at the central bank to monitor, investigate and report proceeds of crime to police o passage through parliament to enact relevant acts o o o o criminal code amendment ( money laundering and terrorism financing ) un financial sanctions aml / counter terrorist financing proceeds of crime act these reforms have ensured we have a sound and prudently managed financial system with a world - class payment system. i encourage you all to utilise the financial products and services offered by our financial system with institutions authorised by the central bank when you enter the workforce. in line with the government ’ s vision 2050 objective of wealth creation, the bank is driving the financial inclusion program under the national strategy for financial inclusion & financial literacy 2014 – 2015. a key priority of the strategy is to reach one million unbanked lowincome papua new guineans and micro and small enterprises, with a diverse range of financial services. 50 percent of whom are to be women. the program has been rolled out with the support of the licensed financial institutions to promote the savings culture among the population. these have been facilitated through establishment of the micro finance companies and micro banks. to enhance financial literacy of the population, the central bank carried out the financial education through the financial literacy program. these include visits to selected provinces to conduct the programs, schools programmes for financial products tailored to students, hosting of conferences and workshops through the cefi. there are plans for collaborative work with the department of education by including it in the core curricular for primary and secondary schools. bis central bankers ’ speeches you graduands will be entering the workforce as the country experiences a lot of development. your training at iea port moresby equips you for a working life. equally important though is the need for you to be financially literate in managing the earnings of your labour. you must know how to budget your earnings, how to save and also how to invest. for what is the point of going to work everyday, earn an allowance or salary but struggle to get by