maintaining financial stability and safeguarding financial integrity of a jurisdiction, to more micro ones, including consumer protection, without compromising on technological developments. our partnership with the oecd can only provide more credence to our jurisdiction as an international financial centre of repute and will, at the same time, strengthen and facilitate adoption of international best practices. under the agreement signed today, we shall cooperate in key fields covering a wide spectrum of economic and financial sector policies. in the long term, this initiative will not only be confined to cooperation but will also provide a range of exciting network opportunities for our benefit. it will build the capacity of the regulatory bodies and law enforcement agencies in our region. i look forward to witnessing the relationship flourish over time and becoming a reference in our region in the elevation of african specialists in the financial services and law enforcement fields towards excellence. ladies and gentlemen, i need not remind you of the numerous challenges over the past few years, ranging from the covid - 19 pandemic to geo - politically inflicted global inflationary environment, and more recently to some financial market turmoil in the us and europe with the onset of financial trouble in certain us banks. as such, as regulators, we need to comprehend that we are at the epicenter of seismic shifts in macroeconomic and macro - financial environment and that these changes have implications on our work. these events are reminiscent that we are in need of continuous adaptation in order to survive the new rules of the game in a new world economic order. being ahead of the curve is the norm. it is crucial for us, regulators, to uphold the public good and to deliver on our sociallymandated goals with panache by taking cognizance of all scenario - based challenges as well as by being adequately equipped with the appropriate toolkits for dealing with those challenges. in this realm, i can positively confirm that, through its rich program delivery over the past few years, the rce has ceremoniously assisted regulators in the region in taking cognizance of these manifold challenges. the rce has organised various workshops in the past year in a number of topical areas, including financial technology, climate change and combating financial crime, to name just a few. developments in these fields are taking place at breakneck speed and are consistently plaguing the regulatory landscape with new insights that were hitherto outside the purview of regulators. the rapid inroads of technology and blockchain innovation into the payments

instruments that allow them to diversify the risks associated with their investments along two broad dimensions : across firms, industries and nations ; and over time. 6 financial markets also allow entrepreneurs to manage risks from sources such as movements of interest rates or currencies. financial institutions are able to hedge another type of risk – liquidity risk. liquidity transformation – the fourth function in my list – helps control liquidity risk for the aggregate economy. individuals generally express a high preference for liquidity in anticipation of uncertain future disbursements. so, there is a tendency – on the lenders ’ side – for a large share of savings to be held in cash, or in very short - term debt instruments. borrowers, however, typically require loans with a long maturity. the more potentially lucrative a project, the more deferred its economic payoffs. we can see here the emergence of a trade - off between the social value of a long - term investment and the private value of liquidity. financial intermediaries – in particular depository institutions – reconcile the trade - off. by engaging in maturity transformation, they make it possible for socially - valued long - term projects to be funded by privately - desirable liquidity. likewise, well - developed equity markets constitute a permanent source of funding for companies while savers are able quickly and easily to convert their shares back into cash. the final key function of finance is “ price discovery. ” in textbook financial markets, asset prices on average reflect all economically relevant information. the market force that moves the trading system close to this ideal – in which prices are “ correct ” given the current state of knowledge – is arbitrage, the simultaneous purchase and sale of the same asset in two different markets at advantageously different prices. by engaging in arbitrage, financial players eliminate price discrimination. by removing price differences that are not motivated by differences in payoffs or underlying risk characteristics, arbitrage eliminates the potential for rents in the economy. in summary, financial intermediation – if well - designed and properly administered – has the capacity to allocate financial funds more efficiently in the economy. by doing so, it has the power to raise the level of savings and investment. see e. g. diamond and verrecchia ( 1982 ) or jensen and murphy ( 1990 ) for an empirical examination. see levine ( 2005 ). this is not just theory. a growing body of empirical evidence using very different methodologies and datasets for