njuguna ndung ’ u : corporate social responsibility in kenya remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, on the occasion of the launch of equity group / master card foundation scholarship, nairobi, 8 february 2010. * * * the rt. hon. raila odinga, prime minister of the republic of kenya ; hon. prof. sam ongeri, minister for education ; mr. peter munga, chairman of equity bank ; dr. james mwangi, chief executive officer, equity bank ; distinguished guests ; ladies and gentlemen : 1. i am honoured to join you this morning on this important occasion. let me at the outset acknowledge the presence of the right honourable prime minister and the honourable minister of education. your presence here is testimony to the emphasis that the government of kenya places on education. 2. allow me also to salute the equity group foundation and the master card foundation on the launch of scholarships for top primary school performers. this is a worthy extension of the corporate social responsibility activities of equity and master card. i urge other entities to take up similar initiatives. 3. developing the requisite human capital base is the cornerstone for vision 2030. endogenous growth models emphasize the role of human capital. inadequate human capital will choke growth and condemn the country to a low equilibrium trap. 4. the focus of this foundation on high performing students from vulnerable backgrounds who may easily drop out of the education system should serve as the best signalling mechanism for hard work and excellence. 5. i look forward to the success of this foundation and the rolling out of similar schemes by the corporate sector. i am sure that these scholarships will nurture kenya ’ s next generation of transformational leaders. 6. it is now my pleasant duty to invite the honourable minister for education to address this distinguished gathering. honourable minister, you have the floor. ajith nivard cabraal : expanding financial services in sri lanka address by mr ajith nivard cabraal, governor of the central bank of sri lanka, at the opening of a new branch office in jaffna by the hongkong & shanghai banking corporation ltd, jaffna, 11 february 2010. * * * my dear friends, i am delighted to be here in jaffna today for the opening of a new branch of hsbc, one of the market leaders in global banking. the history of the hsbc in sri lanka could be traced back to 1884, when it

would be easier than switching to physical banknotes. in other words, it might be easier to run on the banking system. this could have adverse implications for financial stability. given these various considerations, we do not currently see a public policy case for moving in this direction. we will, however, keep that judgement under review. 4. exchange settlement accounts for all australians? another possible change that some have suggested would encourage the shift to electronic payments would be for the central bank to issue every person a bank account – for each australian to have their own exchange settlement account with the rba. in addition to serving as deposit accounts, these accounts could be used for low - cost electronic payments, in a similar way that third - party payment providers currently use accounts at the rba to make payments between themselves. some advocates of this model also suggest that the central bank could pay interest on these accounts or even charge interest if the policy rate was negative. 5 on this issue, we have reached a conclusion, rather than just develop a hypothesis. the conclusion is that we do not see it as in the public interest to go down this route. 8 / 11 bis central bankers'speeches if we did go down this route, the rba would find itself in direct competition with the private banking sector, both in terms of deposits and payment services. in doing so, the nature of commercial banking as we know it today would be reshaped. the rba could find itself not just as the nation ’ s central bank, but as a type of large commercial bank as well. this is not a direction in which we want to head. a related consideration is the same financial stability issue that i just spoke about in terms of electronic banknotes. in times of stress, it is highly likely that people might want to run from what funds they still hold in commercial bank accounts to their account at the rba. this would make the remaining private banking system prone to runs. the point here is that exchange settlement accounts are for settlement of interbank obligations between institutions that operate third - party payment businesses to address systemic risk – something that is central to our mandate. a decision to offer exchange settlement accounts for day - to - day use would be a step into a completely different policy area. 5. new settlement systems based on distributed ledger technology and central bank money? one final possibility is for the rba to issue australian dollars in the form of electronic files or tokens that could be used within specialised payment and settlement systems.