alongside financial stability comes another topical issue in development debates across the globe, financial inclusion. for the financial system to be relevant to society, it needs to ensure that as much of the eligible target population has opportunity to access a variety of financial services ranging from credit, savings and payments, transfers, pensions, capital markets and insurance services. inclusion is an essential pre - condition to enhancing wealth creation and poverty reduction and ultimately broad based economic development. the consultative group to assist the poor ( cgap ) defines financial inclusion as a “ state in which all people who can are able to have access to a full suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the clients ”. these financial services are bis central bankers ’ speeches delivered by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, rural, and other excluded populations. ladies and gentlemen : why should we, as regulators, be concerned about the levels of financial inclusion in our respective jurisdictions? individuals and households lacking adequate access to a full range of responsibly delivered, affordably priced, convenient, formal financial services would be severely constrained in participating fully in the economy. as an entity, the financial sector would also face bleak prospects in terms of expansion and longevity, which holds back overall economic development. but more importantly, financial inclusion is supported by financial stability. in kenya, the proportion of the population totally excluded from formal financial services, as revealed by the finaccess 2006 and 2009 surveys, stood at 38. 3 % and 32. 7 % respectively. the proportionate reduction between the years is largely attributable to the advent of mobilebased financial services which have indeed revolutionized the provision of formal financial services and availed these to the market affordably and conveniently. for us to bring costs of financial services down, we need full inclusion. ladies and gentlemen : given the statistics above, as financial sector regulators, we share common aspirations of making the financial sector more stable, efficient and accessible. though these objectives may at times appear competing, they are for the most part complementary. stability is a pre - requisite for efficiency, while both are in turn required to raise inclusion. in cognizance of this, the central bank, jointly with other players, has undertaken several initiatives and reforms aimed at boosting overall inclusion. these include : licensing of deposit taking microfinance institutions ( dtms ), focusing

in the past few years : large increases in commodity prices, notably oil prices, and geopolitical tensions ; the pressures of global competition ; uncertainty and the short - term impact of certain reforms to modernise the welfare state and prepare social security systems for population ageing ; and – last, but by no means least – uncertainty about the current and future stance of fiscal policies in many euro area countries. if we can agree on this diagnosis of the reasons for low growth in europe, the elements of a remedy are already emerging. the lisbon agenda – especially after its recent refinement and refocusing, which the ecb strongly supports – addresses many of the structural weaknesses of the euro area economy. it is no coincidence that countries which score highest with regard to the achievement of the lisbon goals are also the ones with the most robust growth performances over recent years. the example of the nordic countries shows how reforms of tax and benefit systems can encourage labour participation ; how investment in education and training and how greater diffusion of advances in information and communication technologies can spur productivity growth ; and how structural reforms in labour and product markets – in a process of schumpeterian “ creative destruction ” – can open up new avenues for growth. robust growth in europe is not a “ mission impossible ”. it can be done. and it can be done without abolishing the basic features of what we call the european social model. can it be done inside monetary union? the single monetary policy, conducted for the euro area as a whole, is playing its part already – notably by providing a low inflation environment with favourable financing conditions. and, of course, the euro has eliminated, once and for all, the intra - euro area exchange rate volatility. the revised fiscal framework of the stability and growth pact – if implemented in a rigorous and responsible fashion – still has the capacity to guide national fiscal policies on a sustainable path, thus bolstering confidence, reducing uncertainty and fostering growth. but clearly, the onus is on national policies, especially structural policies to promote growth, competitiveness and employment. thankfully, things are moving : throughout the euro area, we see governments embarking on structural reforms, some courageously, others somewhat more timidly. some euro area countries – notably germany, but also france, austria, belgium and finland – have made significant progress in improving competitiveness over the past few years. and competitiveness is a key determinant of longterm growth. of course, europe