##udential perspective in financial regulation to curb excessive risk on certain sectors. guidelines have been issued for the implementation of macro - prudential policy measures such as caps on loan to value ratio, debt2 / 4 bis central bankers'speeches to - income ratio, higher provisioning and capital requirements for certain sectors. the macroprudential rules have been reviewed from time to time in the light of variations in the vulnerabilities of the system. one among the essential aspects of supervision that are crucial for macro - level monitoring is the efficient exchange of information between supervisors, both at home and abroad. such an exchange provides an essential supervisory tool to support the supervision of banking groups. in this respect, the bank has signed memoranda of understanding ( mous ) with several domestic and foreign regulatory authorities. the banking act 2004 allows the bank to share information with any other central bank, under conditions of confidentiality. we are mindful, at the bank, that exchange of information is crucial with regulators of countries where our banking groups hold a regional presence. the bank has, in this context, held three supervisory colleges since 2013 with its host regulators. in mauritius, a memorandum of understanding ( mou ) was drawn since december 2002 between the two supervisory authorities, namely the bank of mauritius and the financial services commission, on information sharing. over the years, the cooperation and coordination of these two institutions have been enhanced through the setup of a joint coordination committee ( jcc ) and several working groups to coordinate supervisory work on common supervisory areas. the jcc typically meets every two months and reviews areas of interest. in addition, as the first deputy governor of the bank, i have been appointed vice - chairman of the fsc since june 2017. this appointment makes the cooperation between the two institutions more efficient and focused. as part of its reform strategy to reinforce the domestic banking sector, the bank also initiated changes to the corporate structure adopted by the two largest banking groups in mauritius. the separation of banking activities from non - banking activities limits the risk of contagion from nonbanking business to the bank, and allows management to focus on their core business of banking. in line with basel iii requirements, these banks are made to hold higher capital requirements. five domestic banks have been identified as being domestic systemically important banks, and since 1 january 2016, these banks have been required to hold, in a phased manner over a four - year period, an additional capital requirement ranging from 1 to 2. 5 per

##urrent or capital. 26. at this stage of the development of our country, the best contribution that the central bank can make is to keep inflation low, stable, and predictable as the foundation for a fairer and more equal society. inflation is the worst form of taxation. it is regressive and enemy of the poor. price stability promotes inclusive as well as sustainable growth. exchange rate stability operates through the import channel to support price stability. regular calls for what is euphemistically called “ a competitive rupee ” are an invitation to depreciate the currency. it is difficult to see how an unequal society, with an import - dependent economy, can depreciate its way to development. 27. the central bank is rightly concerned with the distributional effects of monetary policy. borrowers have been subsidized for too long by savers. savers have responded to persistent low interest rates by halving the savings effort over the last two decades. in parallel, low interest rates have boosted the wealth of asset holders and increased inequality. as the us ends quantitative easing and normalises interest rates, we must prepare for greater currency volatility and changing market sentiment. the central bank will have its hands full in combating these pressures to ensure continued stability. we must always bear in mind that price stability and exchange rate stability engender social stability – and that is the public good we should all be working for. the end 28. without foresight, and concerted action now, we will leave a poor legacy for our children to live in a socially and environmentally degraded and deeply divided society. change we must. for as the political philosopher edmond burke once declared : bis central bankers ’ speeches a state without the means of change is without the means of its conservation. 11 we should all be in the business of change. change for the better is the order of the day. 29. after these weighty ponderings, let us turn to lighter things for a change. as we prepare to tuck into the delightful fare awaiting us, may i invite your attention to the first law of dietetics, as proclaimed by best - selling science fiction writer and noted biochemist, isaac asimov 12. when i tell you what this law says, you will understand why it must be taken with a pinch of salt, preferably a large one : if it tastes good, it ’ s bad for you. salt or no salt, this first law of dietetic