, concerned with systemic risk issues. • in the field of legal convergence, the strict implementation of eu treaty obligations, in particular those concerning the independent status of central banks, will be of fundamental importance. institutional, personal and financial independence are constitutive elements of central bank independence which are not an end in themselves but are instrumental in attaining functional independence. moreover, great importance should be attached to responsibility, accountability and transparency as a counterpart of independence. • as i already mentioned before, the euro has become the anchor or key reference currency in most accession countries. however, there is no general guideline for monetary policy strategies and exchange rate policies before eu accession. different regimes are feasible, as long as they support the nominal and real convergence process. upon accession to the european union, new member states shall treat their exchange rate policy as a matter of common interest. after accession, although not necessarily immediately, accession countries are expected to join erm ii. the key features of erm ii are that it has stable, but adjustable central rates to the euro for the participating currency, with fluctuation bands of + / - 15 % around the central rate, and that it uses a common procedure for major decisions regarding the conditions of ( voluntary ) participation in the mechanism. erm ii is flexible enough to accommodate the features of a number of existing exchange rate strategies. the clear incompatibilities with erm ii that can be identified already at this stage are the cases of free floating, crawling pegs and pegs against anchors other than the euro. • entry into the euro area will be based on fulfillment of the maastricht convergence criteria. the treaty establishing the european community requires strict and sustainable fulfillment of these criteria, which will be applied to future euro area entrants in the same way as they have been in the past. • the ongoing dialogue between the eurosystem and accession countries´ central banks will be further expanded. in particular, the eurosystem - and, of course the oesterreichische nationalbank - stand ready to enhance its cooperation activities in all relevant areas, including economic and monetary policy analysis, payment systems, statistics, legal issues and other areas. ladies and gentlemen! let me conclude by saying that i welcome the conclusions of the european council meeting in nice stating that it is time to give new momentum to the enlargement process. the institutional reform work within the european union has now reached a stage which makes the union ready for enlargement, and

of national strategies that promote financial inclusion are critical to enhancing access to a diverse range of financial products to the unbanked in kenya, the mandate of the government to enhance the deepening of financial markets by fostering access, efficiency and stability is captured under kenya ’ s vision 2030. the central bank ’ s approach to achieving its role under vision 2030, is centered on the promotion of an enabling legal and regulatory framework that fosters the development of a diverse range of financial service providers, while guaranteeing its dual mandate of financial stability and financial integrity. central to this objective has been the licensing and regulation of microfinance banks. the first microfinance bank in kenya was licensed in may, 2009. this paved the way for 11 other microfinance banks which have been licenced to date. the 12 licenced microfinance banks have made a significant contribution to financial inclusion in kenya. this is evidenced by the number of active deposit and loan accounts as at december 2015 which was 931, 585 and 342, 481 respectively. in value terms, this represented bis central bankers ’ speeches ksh. 40. 5 billion in deposits and ksh. 46. 9 billion in advances. further, microfinance banks had a footprint of 109 branches and 1, 154 agents as at december 2015. while commendable achievements have been made in the past 6 years, the microfinance sector in kenya still has considerable opportunities and challenges that institutions need to tackle in order to realize their full potential. key amongst these challenges include the high cost of credit, inadequate products and services, and weak consumer protection frameworks. microfinance institutions must be willing to make a difference if the full benefits of microfinance and financial inclusion are to be realized. microfinance institutions must be prepared to employ innovative delivery channels to reduce their operational costs, and thereby enhance their reach and efficiency. an essential element in this process is recognizing the characteristics of the customers of these institutions and tailoring lending mechanisms to meet their situations. policymakers, on their part, should support the development of appropriate support infrastructure to facilitate the last mile delivery of suitable financial services. therefore, the development of proportionate, risk - based, regulations by policymakers is critical to guaranteeing the development of a dynamic, robust and sustainable microfinance framework for a country. the starting point towards this collaborative structure is a consultative process to developing a forward - looking framework for regulation and supervision of microfinance institutions. developing