to start islamic finance operations here in mauritius, and welcome hsbc amanah to our shores. today, my colleagues and i who have worked on this subject for two years now feel a legitimate sense of fulfillment. and i can tell our friends from hsbc : you add depth to our financial sector. and give a new dimension to your long - established presence here. you also comfort us in our ambition to grow and develop our country as a major international financial centre. in these very difficult times that we are going through, when we inspect every passing cloud for any trace of silver lining, can we perhaps expect amanah to be the spark that we are looking for to re - energise our faltering economy? all our very best wishes to you and your team, and a very good day to all of you, ladies and gentlemen, who are here with us this morning for the launching ceremony of the very first islamic finance operation in mauritius.

banks under the standardised approach to risk - weighted assets, basel iii determines a more detailed risk weighting and lesser reliance on external credit ratings. banks are also required to hold “ capital conservation buffers ” of an amount equal to at least 2. 5 per cent of the risk - weighted assets, in the form of cet1 capital, which would be available in times of stress. however, the minimum level for total capital requirements remains at 8 per cent of risk - weighted assets. in addition, banks would have to keep a leverage ratio as a percentage of total assets inclusive of off - balance - sheet items such as derivatives and letters of credits to constrain their debt build - up. finally, banks would have to keep a countercyclical buffer from their retained earnings during periods of high economic growth to even out any stress on their capital during periods of economic downturns. in the case of global systemically important banks ( gsibs ), they would be subject to additional capital requirements. 1 / 4 bis central bankers'speeches in effect, these higher common equity requirements would undoubtedly incentivise shareholders, investors and senior management including board of directors to take less risk. liquidity risk, implicitly covered in pillar 2 under basel ii, is a stand - alone risk requirement under basel iii. the liquidity risk is addressed by the introduction of the liquidity coverage ratio, which would provide banks with enough high - quality liquidity instruments for 30 - days in the event of stressed conditions, and the net stable funding ratio for stressed liquidity conditions of up to one year. both the lcr and the nsfr seek to reduce the excessive mismatch of banks ’ assets and liabilities structure. in mauritius, basel iii implementation has been a gradual process. prior to july 2014, the year basel iii was introduced, banks in mauritius had to maintain a 10 per cent minimum capital adequacy ratio consisting of a ratio of 5 % tier 1 capital and a similar ratio of 5 % tier 2 capital to risk - weighted assets. tier 1 capital consisted of equity, general reserves, statutory reserves ( 15 % ) and retained earnings. tier 2 capital, limited to 100 % of tier 1 capital, consisted of subordinated debt of maturity of at least 5 years, which can only be redeemed after approval has been received from the regulator, revaluation reserves with a 55 % haircut and other instruments as may be approved by the regulator. under basel iii,