now turn to the experiences of the regional central banks in the east african community ( eac ) integration agenda. as you may be aware, the eac has mandated the monetary affairs committee ( mac ) with the key objective of implementing a monetary union which is a precursor to the full integration of the east african community. mac is comprised of the governors of the five east african central banks. technical sub - committees of mac focus on the thematic areas of macroeconomic issues of convergence, bank supervision, payments systems, financial markets, information technology and capacity building. these areas are indeed the building blocks of the envisaged monetary union. of particular interest to the banking sector is the harmonisation of regulation and supervision. this is of key importance to the increasingly regional kenyan banking sector in view of the costs associated with compliance to varying regulatory regimes. therefore, the harmonization of banking supervision and regulation continues to be at the top of the mac radar screen. what has been our score card in this area? overall, mac has served as a useful forum to share experiences on topical bank supervision and regulation issues and forge a common way forward. indeed harmony has been achieved in key regulatory issues such as operational independence of central banks, publication / disclosure of financial statements by commercial banks and business continuity management. we continue to share supervisory policies and procedures through joint arrangements. the east african central banks are at the moment in active discussions on a draft regional memorandum of understanding ( mou ). the mou, which we target to finalise by the end of the year, will enhance information sharing amongst the partner central banks. as you will appreciate, this initiative will facilitate the consolidated supervision of our regional banks. there are however challenges, some of which are legislative in nature as well as the microstructure of our financial system. going forward, mac will continue, relentlessly, to work towards harmonizing the east african banking supervision and regulation regimes. we are acutely aware that a harmonized regulatory regime will reduce compliance cost and spur regional expansion of banks. it is not an easy road, but one that we must tread. our vision will be ultimately achieved when the partner central banks can issue “ east african banking licences ” valid in all the partner states. ladies and gentlemen : it is my expectation that over the course of this morning, you shall as market players : • clearly identify ways in which the banking sector can facilitate regional integration. • brainstorm on regulatory and other barriers to regional integration from a banking and finance perspective

, adopted by the council of the european union. we have published guidance to banks on npls, including our supervisory expectations for their prudential provisioning. furthermore, we continue to devote significant attention to potential valuation issues, with a focus on banks that have material exposures to complex financial assets – including but not limited to level 3 assets – through both our off - site and on - site supervisory processes. with respect to financial stability more broadly, recent episodes of heightened financial market volatility have led to only limited contagion across countries and markets. currently, there is no indication of excessive credit growth or broad - based asset price misalignments. however, some sectors of the real estate markets warrant close monitoring in some euro area countries, in particular following up on warnings issued by the european systemic risk board. furthermore, developments in the non - bank financial sector require monitoring as well. we expect the national authorities to remain vigilant and continue to use the macroprudential policy instruments at their disposal to counteract any emerging risks when necessary. and on our side, we will contribute within our macroprudential mandate. an orderly withdrawal of the united kingdom from the european union poses a limited overall risk to the euro area ’ s financial stability. however, the uncertainty triggered by a cliff - edge brexit could have the potential to pose a more significant downside risk to financial stability. we will continue to monitor developments ahead of uk ’ s exit on 29 march 2019. in view of the prevailing uncertainty about the outcome of the negotiations and the ensuing legislative and regulatory decisions, the private sector is primarily responsible for making adequate arrangements to prepare itself for any scenario. the positive developments in the euro area are not independent of the global growth momentum. open trade, investment and sustainable financial flows play a key role in enhancing productivity, for example through the cross - border diffusion of new technologies that drive efficiency improvements. these factors need to be underpinned by effective multilateral cooperation, both in trade and in financial regulation and supervision, to help avoid major disruptions to global financial stability. preserving openness is crucial if the global economy is to thrive and secure its growth potential. encouraging multilateral cooperation is a central theme of the g20 eminent persons group report. it emphasises the need to firm up global financial resilience and reduce the incidence and severity of crises in order that countries do not fear openness. we support discussing the proposals of the g20 eminent persons group with an