and reporting practices, and building adequate capacity among the regulators. this requires moving swiftly to develop smart – standardized, measurable, actionable, reliable and transparent regulatory and supervisory frameworks – surveillance supervisory approaches, and assessment tools. this would effectively safeguard the soundness, integrity, efficiency, and stability of the financial system in kenya and the region. i believe smart regulation is the way to go because its very architecture minimises regulatory burden, focuses on outcomes rather that processes, and applies regulatory measures in proportion to the risk profile of individual institutions. smart regulations allow regulators to enforce more efficiently and allow regulated entities to comply cheaply and reliably. 3. stress testing : stress testing has become a cornerstone of prudential supervision and risk assessment across the world. the central bank has strengthened its capacity and has conducted banking system stress testing exercise using the cihak framework since january 2015. we have drawn important lessons from the results of these exercises and i bis central bankers ’ speeches urge other regulators to adopt similar tools, which clearly demonstrate the value of forwardlooking assessments of risks and vulnerabilities to the financial system. 4. financial innovations and consumer protection : new technologies have expanded the possibilities of financial services and products some of which have brought tremendous benefits to consumers, and resulted in measurable improvements in financial and greater access to the mainstream banking system. however, along with the rapid growth of these financial services is the emergence of complex financial products requiring enhanced consumer protection measures. i see the need to prioritise consumer protection in ways that will reduce if not eliminate consumer susceptibility to abuse or fraudulent activities. an effective consumer protection regime is essential and should broadly entail : • transparency and accountability in pricing ; • clarity on charges and terms of financial products and services ; • avoiding reckless and fraudulent lending practices ; • protection of financial service consumers against over - indebtedness ; • fair debt collections and transparent marketing practices ; • privacy of client data including credit information sharing arrangement amongst all credit providers through credit reference bureaus ; • ethical standards and staff behaviour in credit lending and screening practices ; and • alternative dispute resolution mechanism. in this regard, we should engage with our stakeholders to promote effective financial services consumer protection mechanisms through innovate financial education programmes and regulatory reforms. 5. recovery, crisis management and resolution frameworks : the global financial crisis that has affected us all since 2007, offers important lessons in crisis management and resolution frameworks. an important lesson from that experience is the central

basis on which we have determined loan loss projections, and as part of a continuing effort to create more transparency around these matters. i ’ d also like to mention that the data verification exercise has provided some reassurance about data quality, while not all of the relevant data or paperwork was readily accessible, the consultants did not find data and paperwork matters of material impact on likely losses. smaller, but more soundly constituted, irish banks should be in a better position to provide loan and other financial services to households and businesses and to support the economic recovery. bis central bankers ’ speeches