yandraduth googoolye : mauritius – a regional financial services hub address by mr yandraduth googoolye, first deputy governor of the bank of mauritius, at the opening ceremony of the symposium on the theme “ mauritius – a regional financial services hub ”, organised by the mauritian management association, pointe aux piment, 10 october 2012. * * * honourable anil kumar bachoo, gosk, vice - prime minister, minister of public infrastructure, national development unit, land transport & shipping & acting minister of foreign affairs, regional integration and international trade dr rajun jugurnuth, president, mauritian management association mr marc hein, chairman, financial services commission ms madhavi ramdin, head of acca mauritius chief executives distinguished guests ladies and gentlemen good morning i am delighted to be in your midst for the opening of this symposium. i extend my warm appreciation to the mma for this laudable initiative which comes at a very opportune time when the country, having embarked on a rapid development path, is increasingly in need of professionals who are pragmatic in their approach but modern in their mind, to say but the least. the financial sector is at the core of the economic system, providing a range of services which are necessary for domestic and trade related industries to function efficiently and enabling consumers to effectively manage their inter - temporal consumption - savings requirements. while economic growth tends to induce accompanying financial sector growth, empirical research demonstrates a well - established causal link from financial sector development to economic growth. in short, having a financial sector that meets the financing and investment needs for consumers, businesses and governments as efficiently and competitively as possible, increases the nation ’ s capacity to grow. efficiency and competitiveness are more likely to be evident in an economy that is open to international competition and world ’ s best practices. countries that have highly efficient and competitive financial sectors are also likely to be exporting those services. mauritius has a comparative advantage in many parts of its financial sector compared with most other countries in the region. while we remain a very open trading economy overall, our exports and imports of financial services as a percentage of gdp are, by international standards, relatively low. the opportunities for leveraging off our financial services skills and expertise, in the region and beyond, are potentially enormous. the financial sector in mauritius is an important contributor to national output, employment, economic growth and development. the sector accounts directly for around 10. 0 per cent of gdp

cooperation. i wish to return to the subject of corporate governance which i am sure will be of great relevance to the audience. we have in august issued a revised guideline on corporate governance with a view to bringing improvements in the corporate governance framework of our financial institutions. the guideline has been aligned to the new recommendations of the basel committee on banking supervision and greater emphasis is now being laid on the independence of directors. we are requiring, amongst others, that the chairperson of a board in a local bank be an independent director. we have further requested the setting up of local advisory boards for the branches of foreign - owned banks. additionally, greater transparency is being required regarding the role of the board of directors, particularly on ethical standards and corporate values. we believe that the soundness and resilience of the banking system, and by extension the financial system, involves, inter alia, the proper functioning of various mechanisms which inevitably entail accountability and transparency. regarding transparency, the bank of mauritius has succeeded with the collaboration of banks, in disclosing the overall camel rating of individual banks on its website and on a biannual basis. mauritius is among the few countries and the first in the sub - saharan region to have gone public with those ratings. i believe that the publication of the camel ratings has brought in higher market discipline in the banking system and is encouraging banks to improve their performance. certain jurisdictions have even embarked on the dissemination of stress - testing results of their commercial banks. we have constantly been modernizing our payments system. the bank of mauritius launched the bulk clearing and cheque truncation system in september 2011. this system allows for electronic clearing of cheques as well as low value payments. we are presently working on a national switch project. as you may be aware, the regional payment and settlement system ( repss ) of the comesa has become operational effective 3 october 2012. the repss is an initiative of the comesa clearing house and is fully endorsed by all comesa member states. the bank of mauritius is the settlement bank in the repss and the status of a settlement bank for such a huge market, spread over a total area of 12. 8 million square kilometres and with a population of 413 million, is a coveted position and will benefit the country ultimately. the repss opens another opportunity for our country to enhance its role in the region. in fact, an efficient cross border payment system is a necessity for trade integration and the future of repss is very