perks ligoya : co - ordinated regulations for the sadc region address by dr perks ligoya, governor of the reserve bank of malawi, at the conference for the committee of insurance, securities and non - bank financial authorities, lilongwe, 17 september 2009. * * * the chairperson, committee of insurance, securities, and non bank financial authorities, mr patrick mhango the deputy governor, reserve bank of malawi, mrs mary nkosi the general manager, reserve bank of malawi, dr wilson banda distinguished delegates ladies and gentlemen, it gives me pleasure and honour to grace this important occasion. the reserve bank of malawi is honoured to host this year ’ s conference for the committee of insurance, securities, and non bank financial authorities ( cisna ) and in this regard i would like to welcome all delegates particularly those who have travelled from regional member countries to participate in this event. chairperson, ladies and gentlemen, i wish to commend all cisna members for your continued interest and dedication to the sadc mission. your attendance in such large numbers is clear testimony of your desire to achieve economic integration in the sadc region. we in malawi acknowledge benefits of regional integration which, i am glad to say, include systematic growth and development of the financial sector in general, and of insurance, securities, pension and microfinance subsectors, in particular. chairperson, ladies and gentlemen, the financial sector is a catalyst of economic growth and all effort to develop and deepen this sector remains a key public policy challenge. in this regard, i find the role of cisna to be consistent with aspirations of our governments. cisna supports initiatives toward the creation of a strong base of domestic non - bank financial institutions, particularly those specialising in the mobilisation of long - term savings, for example life insurance, pensions and collective investment schemes. in addition, cisna supports measures to increase access to quality insurance and other risk management products by households and entities in the region. cisna also addresses issues pertaining to market infrastructure and liquidity of capital markets in the region. this is a critical function because assurance of liquidity acts as a catalyst for greater participation of investors, both local and foreign. these noble goals are supported by sadc governments through protocols which aim at promoting financial markets. chairperson, ladies and gentlemen, cisna plays a very important role in the improvement and harmonization of regulations for the sadc region. sound and well co - ordinated regulations promote and

##ing of the value of troubled assets held by banks. all these measures were under the umbrella of the common principles for concerted action, at the level of the heads of state and of government in europe, and at the g20 meetings more globally. among the demand - stimulus measures, and aside from the operation of the automatic stabilisers, which are pivotal in economies such as spain, measures based on increased public spending and aimed, on many occasions, at the groups and sectors most adversely affected by the crisis, tended to predominate. the european economic recovery plan approved in december provides the reference point here for the coordination of measures in europe. the spanish authorities have also adopted a broad set of similarly geared measures. these include the raising of the limit on deposit guarantees, the creation of the fund for the acquisition of financial assets to purchase high - quality assets from spanish banks, guarantees for bank bond issues, various special financing facilities instrumented through the ico ( official credit institute ), and the introduction of new personal income tax deductions and the launching of the state fund for local investment and of the special state fund for revitalising the economy. in spain, the international crisis has impacted the economy at a particularly delicate time. already under way was a process of adjustment of the imbalances that had built up over a long growth phase in which spain had shared some of the above - mentioned factors of fragility of the world economy, though not all of them and not to the same degree of intensity. certain components were undoubtedly particular to spain. starting with the shared elements, the expansion of spanish household and corporate spending was based excessively on debt. true, the private sector was starting from relatively low debt levels. admittedly, too, euro area membership provided a particularly valuable framework of stability and broadened financing possibilities. no less true, however, was the fact that the single monetary policy stance proved overly lax during all these years for spanish domestic conditions and that fiscal policy, even though substantial budgetary consolidation was undertaken, was not enough to offset the excessive monetary looseness. a greater containment of current spending in the upturn would have helped curb the imbalances and would have strengthened the underlying budgetary position. other features of our expansionary phase were, however, more specific. in spain, productive factors and financial resources were overly concentrated in the real estate sector. further, some of the structural constraints of our economy, such as productivity and the functioning of the labour market