on, a number of new questions have emerged, which i do hope to address. past : what are the lessons of the past twenty years? a natural focus is to explore how we should think about the expansion of central bank balance sheets via quantitative easing ( qe ) and other mechanisms. in lord king ’ s article, discussion of qe is limited to the case of japan and treated as something of an anachronism. but in the aftermath of the global financial crisis – with a long - term downward trend in the equilibrium real interest rate, r - star ; with nominal policy interest rates stuck for long periods at their effective lower bound ; and with disruptions in the financial sector impeding the traditional transmission of monetary policy – the use of qe and other balance sheet policies by central banks has become mainstream. pace poole, qe policies have largely been expressed in quantitative terms ( even if that approach has been somewhat watered down over time ). for example, at the bank of england qe measures have been announced in terms of changes in the stock of gilt holdings in the special facility created to manage the asset portfolio. such an approach inevitably begs the question of whether, and if so in what form, monetary quantities have re - asserted themselves in the conduct, transmission and communication of monetary policy. more generally, the financial crisis and its aftermath have demonstrated that financial markets are subject to periodic disruption. this questions the assumption – embedded in much of traditional finance theory – that equilibrium yields are independent of the quantities of the supplies of different assets. failure of that assumption opens up scope for monetary quantities to have an important influence over a wide range of asset prices and risk premia, and thereby play an important role in monetary policy transmission. changes in the structure of the financial sector – both secular trends and the consequences of regulatory changes introduced following the crisis – have shifted activity away from banks to nonbank financial institutions ( nbfis ) ( what we used to call ‘ shadow banks ’ ). the nbfi sector has become a more important part of the financial sector and, as a result, a more important channel of monetary policy transmission. for monetary policy makers, understanding transmission via the asset markets where nbfis operate has therefore become more important. how money flows within the financial sector – among banks, among nbfis, and between banks and nbfis – influence asset prices are becoming more central relative to the more traditional analysis of how financial flows between banks, on the one hand,

policy effectiveness and improved banking sector stability. 8. our banking system is becoming stronger with capital adequacy ratio reported at 19. 1 per cent at the end of august, significantly above prudential requirement of 10 percent. non - performing loans of the industry continue to ba es o f gh a na nk t. 1 9 5 7 decline and we expect a major reduction as banks begin to implement write off policies, in line with approvals received from bank of ghana to address the legacy loans that have been fully provisioned for. we have also observed a return to efficiency in the industry as operating expenses across banks are beginning to reduce, which should ultimately result in declining interest rates. with the increased capitalization of banks, declining levels of non - performing loans, and better credit risk assessment in the banking system, we should expect the pricing of credit to reflect these trends. interest rates and spreads that have been slow to adjust should move in line with inflation. 9. these are the conditions which would lead to improved access to credit for small and medium enterprises to financial services. they constitute the largest population where the benefits of access to credit touch directly on the fabric of the society and income security, and the ultimate good of raising living standards. 10. as the bank of ghana continues to strengthen the regulatory and supervisory frameworks to restore confidence and promote stability and integrity of the banking sector, it is important that we do not overlook cyber security measures to combat financial crime. as part of the national cyber security awareness month ( ncsa ) in october, which was launched two ba es o f gh a na nk t. 1 9 5 7 days ago, the bank of ghana will inaugurate its security operations centre ( soc ) on the 22nd october and also launch the cyber and information security directive for the industry. subsequent to the issuance of the directive, banks would be required to follow an implementation schedule to ensure that effective cyber security controls are in place to counter any form of cybercrime. 11. through the bank ’ s monitoring systems we have observed the daily attempts by cyber criminals to bypass security controls and exploit vulnerabilities within the cyber and information security defenses of financial systems. to counter these, we are strengthening and increasing the scope of anti - money laundering risk - based supervision and collaborate with the financial intelligent centre ( fic ), economic and organized crime office ( eoco ) and other law enforcement agencies to reduce the incidence of cyber - attacks on the financial sector