financial system more transparent. this part of the reform process is being dealt with by the fsb. major topics on its agenda are the handling of systemically important financial institutions and the “ too - big - too - fail ” problem, resolution regimes, the role of rating agencies, harmonising accounting standards, and rolling back trading in otc derivatives. even though these issues seem to have attracted less attention than basel iii, i am confident that we shall see significant progress in this area by the time of the g20 meeting in november as well. once implemented, the reforms at the microprudential and the macroprudential levels will have a profound impact on the financial system, increasing its resilience and hence its stability significantly. but, going back to what i said earlier, do the reforms also strike the right balance between stability and growth? i am certain they do. true, the development of the new basel iii proposals has been accompanied by concerns that such tighter regulation might have a negative impact on economic performance by severely restricting access to credit. several studies on the potential effects of the new regulatory requirements on the economy have been published recently. a comprehensive cost - benefit analysis has revealed that such fears of a significant negative impact on growth are unfounded. this is all the more the case given that there will be the transition period before the new requirements enter fully into force, which will give banks sufficient time to strengthen their capital base. this favourable overall assessment of the macroeconomic impact of well - designed regulatory reform highlights the fact that there is no inherent conflict between the g20 agenda ’ s objectives of a more stable financial system and of ensuring strong and sustainable growth. and, in terms of the general future outlook for growth, we should bear in mind that the financial crisis has not impaired major drivers of growth. emerging markets, for instance, will still make great efforts to catch up, and technical progress will continue. thus, the crisis certainly does not mark the end of economic growth. rather, what it has done is highlight the importance of sustainable growth and the need for supportive policies – in financial regulation, but also in many other policy areas. 4. conclusion ladies and gentlemen, the events and implications of the current financial crisis have clearly demonstrated how vulnerable our financial system has been. the necessity of reform cannot be denied, financial stability has to and will be reinforced. however, as said earlier, enhancing financial stability is not an end in itself nor is it an obstacle to growth. rather, it

, profitable, and in good shape. our supervision staff are well trained and adequately equipped to carry out the bou mandate to foster a sound financial system. the second issue relates to the licensing of islamic banks in uganda. the bank of uganda has received some inquiries for opening islamic banks or banks which offer islamic banking products. as you are aware the licensing and regulation of financial institutions in uganda is governed by the financial institutions act ( fia ) 2004. some of the provisions of the fia 2004 are not compatible with the islamic banking model, a matter which is currently under review. bank of uganda is in the process of amending the relevant provisions of the fia act with a view to accommodating islamic banking, or enabling existing banks to offer islamic banking products. the bank of uganda has also received technical assistance from the islamic development bank ( idb ) to train the bank supervision staff for full understanding of islamic banking and finance so that they are in position to effectively regulate these institutions once they are established and licensed to operate in uganda. i am therefore confident that, as soon as the law is amended, we should be having an islamic bank or banks offering islamic products in the not too distant future. let me conclude by wishing you once again happy celebrations. may almighty god bless you all eid mubarak, eid mubarak, eid mubarak.