for this liquidity to be usefully applied to domestic and regional investments, interest rates on lending will have to decline substantially. 4. since government domestic securities have now a competing exogenous substitute, those banks that have depended on trading with government securities will now have to apportion a larger proportion of their funds for domestic lending to firms and households. the kib should now help such banks to re - build their infrastructure for monitoring and screening existing and potential borrowers but also supported by the credit reference bureaus. this may have been left behind in the rush to trade with risk free securities. second, the kenya bankers association has provided a breakthrough to transparency in pricing of banking services. in a committee chaired by the cabinet secretary to the national treasury and whose recommendations were announced by the president, there will be a reference interest rate to be called kbrr ( kenya banks reference rate ). it will be an average of cbr and the 91 - day treasury bill – a risk free return on asset indicator. the first kbrr will be announced by the mpc on july 8th, 2014. for us at the central bank the kib and indeed this conference should lead the way to show how pricing of credit will benefit inclusive growth of the financial sector, by benefitting both the borrower and the lender. at the end, we will support very strong inclusive growth agenda of the government. finally, the fatf ( financial action task force ), a standard setting body on monday 23rd june 2014 upgraded kenya from the dark grey list to the grey list on its anti - money laundering / combating the financing of terrorism ( aml / cft ) regime. kenya ’ s aml / cft regime was in 2011 found to be deficient. since then, the country amended its laws, introduced the terrorist financing law and established the financial reporting centre. for kib and kenyan banks, it means it is easier for correspondence bank facilities, easier to negotiate competitive rates for international credit lines and above all, the credit and risk rating for the country is now positively enhanced. these are the issues kib should take on board to see the prospects of the financial sector development in line with the government growth agenda. with these remarks, it is now my pleasure – on behalf of the cabinet secretary to the national treasury, hon. henry rotich – to declare the 2nd kib national banking and finance conference, officially open. i wish you fruitful deliberations and report progress to develop our financial sector

record highs. during my recent trip to upstate new york, i saw first - hand some of the positive developments in rochester and buffalo. after undergoing a prolonged period of economic transformation and reinvention, rochester ’ s economy is now more diverse and dynamic than ever before. meanwhile, the growth in buffalo was striking. the numbers show a dramatic uptick in construction bis central bankers ’ speeches employment, and the visual evidence of development was widespread. i was especially impressed with the downtown and waterfront areas, as well as the new solarcity factory — all of which looked dramatically different than when i visited the area less than two years ago. both of these places are well positioned for future success. on the other hand, the employment recovery has been slow to take hold in both northern new jersey and the lower hudson valley, where jobs are still not back to their pre - recession peak despite employment growing steadily. for northern new jersey, this lag is due, in part, to a stall in the growth of jobs in professional and business services. but the education and health sectors continue to add jobs, and construction employment is seeing a rebound. i also saw a number of bright spots on my visit to the area a few months ago. one was jersey city, which is leveraging its proximity to new york city to attract residents and jobs. another was newark, where i saw signs of downtown development, including teacher ’ s village, a mixeduse community of teachers with new schools, housing and retail businesses. but pockets of weakness remain. for example, in upstate new york, binghamton has had no meaningful rebound in employment. although the u. s. virgin islands and puerto rico remain in a deep economic slump, employment appears to have steadied in both places in recent months. however, puerto rico ’ s weak economy coupled with a fiscal crisis means its economic outlook remains uncertain as it struggles to address its unique set of problems. now, i ’ d like to turn things over to one of our regional economists, jim orr, who will provide a more detailed presentation of economic conditions across our region. bis central bankers ’ speeches