unfortunately that will also mean lower employment in the banking industry. page 11 of 14 as they adopt electronic banking technologies, key challenges for banks will be to ensure that these new technologies can deliver the same quality of, and access to, services for their customers as the more traditional technologies and that the risks entailed in electronic banking are fully understood and can be managed effectively. in particular, banks must ensure that their electronic systems can be safeguarded against cyber - attacks, both to protect the integrity of individual customer ’ s accounts and to prevent threats to the financial safety of the bank itself. the adoption of electronic banking has implications for bank regulation and supervision, which in uganda has traditionally focussed on banks ’ management of credit risk. page 12 of 14 in future, operational risks arising from electronic banking are likely to become of greater significance as potential threats to the financial soundness of banks and their ability to command the confidence of their customers. bank regulators need to strengthen their capacities for monitoring the security of banks ’ it systems. to conclude, i believe that the future of the banking industry in uganda is bright. in terms of productivity, the adoption of international best practises and its use of modern technology, banking is one of the leading industries in uganda. banking also operates in a macroeconomic and prudential regulatory environment, which provides scope for investment and innovation while, at the same time, safeguarding the interests of depositors and the safety and soundness of the financial system. page 13 of 14 consequently i am confident that banks will be able to meet successfully the challenges that they face, and in doing so, continue to contribute to the development of the ugandan economy. finally i would like to wish you all the best for the rest of this conference. thank you for listening to me. page 14 of 14

me start with asia. in hindsight, it is evident that those leveraged economies could not provide adequate profitable opportunities at reasonable risk in the 1990s to absorb the surge in capital inflows. that surge reflected in part the diversification of the western equity markets ’ huge capital gains to a sector of the world which was perceived as offering above average returns. together with distortions caused by a long - entrenched government planning ethos, the flood of investment resulted - - some would say inevitably - - in massive deadweight losses. as activity slowed, burdened by fixed - cost obligations that were undertaken on the presumption of continuing growth, business losses and nonperforming bank loans surged. the capital of banks in asian economies - - especially when properly accounted for - - eroded rapidly. as a consequence, funding sources dried up as fears of defaults rose dramatically. in an environment of weak financial systems, lax supervisory regimes, and vague assurances about depositor or creditor protections, the state of confidence so necessary to the functioning of any banking system was torn asunder. bank runs occurred in several countries and reached crisis proportions in indonesia. uncertainty and retrenchment escalated. in short, the slowing in activity in asia exposed the high fixed costs of a leveraged economy, especially one with fixed obligations in foreign currencies. failures to make payments induced vicious cycles of contagious, ever rising, and reinforcing fears. it is quite difficult to anticipate such crises. every borrower, whether a bank or a nonbank company, presumably structures its balance sheet to provide a sufficient buffer against the emergence of illiquidity or insolvency. the scramble by borrowers to protect their balance sheets when this buffer is unexpectedly breached can lead to a surge in the demand for liquidity that in turn produces a run on the financial system. at one moment, an economy appears stable, the next it is subject to an implosion of fear - induced contraction. in this context a preventive effort to lessen the probabilities of such crises arising - for example, by bolstering the financial system ’ s buffer through more capital or improved bank supervision - - may not in itself further insulate a country from crisis if financial institutions, now faced with a lower cost of capital or lower spread on their debt, leverage away the increased buffer. indeed, one form of moral hazard is that an initially sound financial system that attracts low risk premia could