, useful and relevant to the sector. third, encouraging effective business models. continued resilience of banks can only be realised when banks ensure that their business models are sound. the business models should be strengthened to accommodate new business lines and innovations rolled out by the banks. this informs the drive by cbk to ensure that they maintain sufficient capital to cater for existing and potential risks they are exposed to and their market niche. this informed the introduction of a 2. 5 percent capital conservation buffer effective january 2015. cbk also required banks effective 2013 to develop internal capital adequacy processes ( icaap ) to inform their capital management. though most of the banks have embraced the requirement, we have noted that there is wide disparity on the icaap documents submitted to cbk. to this end, cbk will shortly be issuing a proposed icaap guidance note for comments. the guidance note is expected to strengthen icaap management with capital holdings that are aligned to banks ’ risk profiles and business requirements. as i conclude, it is also worth touching on brexit. while the economic impact thus far has been muted, brexit has created a lot of uncertainty in the financial markets globally. we are also aware of the likely impact on trade, since countries such as kenya may be required to negotiate new bilateral agreements with the united kingdom once it exits the eu. this may have an impact over the medium term, with reduced foreign direct investments as well as export earnings from the uk and eu. cbk is keenly following these developments and is ready to take appropriate actions to safeguard the stability of our economy and the banking sector in particular. with these remarks, ladies and gentlemen, it is now my distinct honour to invite the cabinet secretary, national treasury, mr. henry rotich to officially open the workshop. karibu bwana waziri! bis central bankers ’ speeches

christian noyer : public and private debt – imbalances of global savings introductory speech by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, at session 3 “ public and private debt – imbalances of global savings ”, aix - en - provence economic forum, aix - en - provence, 6 july 2012. * * * in introduction to this session, i would like to make seven remarks. my first remark is inspired by the very title of this session. in advanced countries, the average public debt to gnp ratio is 100 %. in emerging countries, the figure is 30 %. this is a very wide gap, and it represents one of the global economy ’ s largest imbalances. and one of the least mentioned. it also represents a complete reversal of the situation compared with just over twenty years ago. at that time, i remember well, i was chairman of the paris club, and emerging countries came to ask for the rescheduling of their debt. second remark, global demand is still fairly concentrated on the advanced countries. not only is their debt higher, but their savings ( as a ratio of gnp ) are lower. the g7 countries alone still account for 56 % of global consumption. the problem is clear. how can we hope to raise our level of consumption if we need to reduce our level of debt and increase our savings? and if the advanced countries ’ consumption stops growing, what will happen to global economic growth and particularly that of emerging countries with entirely export - oriented economies? which brings me to my third remark : we need the emerging countries to continue investing their savings in advanced countries. we therefore need properly functioning international financial markets. in a world where the savings and financing needs are so geographically dislocated, properly functioning financial markets are a prerequisite for economic growth. but, today the capital markets appear very unsettled and full of anomalies, and not just in europe. • for example, certain sovereigns ( the usa and uk for example ) borrow today at historically very low nominal interest rates and at negative real interest rates despite the fact that their deficits are around 10 % of gnp and that doubts exist regarding the future evolution of their debt levels. • another anomaly : large corporations have accumulated unprecedented cash reserves ( several trillions of dollars ) despite numerous highly profitable and unexploited investment opportunities around the world, unsatisfied