emmanuel tumusiime - mutebile : stamps commemorating the bank of uganda ’ s 40th anniversary speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the launch of the 40th anniversary commemorative stamps, kampala, 3 october 2006. * * * the board of directors bank of uganda the managing director, posta uganda chief executives of financial institutions management of bank of uganda and posta uganda stamp collectors invited guests ladies and gentlemen it gives me great pleasure to warmly welcome you all to this auspicious occasion, which is one of the last of the public series of events that the bank has held to mark its 40th anniversary having been established in 1966. as we close our celebrations, let me take this opportunity to thank our partners in the financial and other sectors, the public, present and past bank staff for participating in the various 40th anniversary events that we held. some of you may wonder why the bank of uganda chose to issue commemorative stamps. stamps and currency are alike in many aspects, namely : 1 ) both hold intrinsic, aesthetic, cultural, educational and monetary value ; 2 ) they reach and touch the lives of many people, cutting across boundaries of race, colour, education and income status ; 3 ) promote the country ’ s image ; and 4 ) reflect future aspirations and 5 ) help recall and record major historic events. it is for this reason that in partnership with posta uganda, we decided to issue four commemorative postage stamps that reflect the bank ’ s achievements and commitment to economic growth and development of uganda. mr. paul lubowa of makerere university designed these stamps. allow me at this juncture to thank the management of posta uganda and mr. lubowa for enabling us to realize this goal. the features for each of the stamps are well set out in the distributed brochures and posters ; let me however highlight some of them. the first stamp of shs 400 carries the uganda ’ s independence monument and our 40th anniversary logo – emphasizing the linkage between the bank ’ s activities especially fostering price stability and uganda ’ s political independence and economy ; the second stamp of shs 600 depicts uganda ’ s abundant wildlife in support of reviving and promoting tourism and emphasizing the bank of uganda ’ s role in safeguarding the foreign exchange earned ; the third stamp of shs 1, 600 depicts the tilapia or ngenge, which is indigenous to uganda ’ s tropical waters bodies. as you all aware,

emmanuel tumusiime - mutebile : the sub - prime banking crisis in the usa and its impact on the east african financial system speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at a commonwealth business forum luncheon, kampala, 21 november 2007. * * * over the last few months, capital markets around the world have been going through uncertain times as a result of the sub - prime mortgage crisis affecting the american banking industry. this started out as a problem of excess liquidity and quickly degenerated into a credit crisis, originating from financial institutions having exposure to the sub - prime market and thereby incurring huge losses as delinquencies and foreclosures increased following us federal reserve ’ s tighter monetary policy. over the last few years, the us financial system had experienced substantial excess liquidity, which created huge surges in the valuations for home prices in the us. as interest rates fell due to excess liquidity, house prices rose rapidly. this was attributable to declining interest rates that saw their lowest levels in the last 20 years. banks lowered lending standards, allowing “ sub - prime ” borrowers to obtain home mortgages on increasingly favorable and imprudent terms. this, coupled with the emergent practice of selling these mortgages to other financial institutions, in packaged products known as collateralized debt obligations ( cdos ), enabled the lending banks immediately to take such mortgage loans off their balance sheets. this increased the banks ’ propensity to make such loans on increasingly liberal and imprudent terms. borrowers with very poor or insufficient creditworthiness were able to obtain mortgages far in excess of what they should have been able to, for houses that were far beyond their means. in addition, these sub - prime mortgages were frequently granted to borrowers with limited or no credit history at variable interest rates, characterized by very low initial “ teaser ” rates, which would be sharply adjusted upwards after the initial period – typically after two years. as house prices rose, borrowers ’ equity in the properties grew and they were able to sell their homes and take out profits or as was more frequently the case, they borrowed against their “ increased equity ” in the properties and used such “ secondary mortgages ” to engage in increased consumer spending, and in other cases, to make payments on the original mortgage. this further created a cycle, resulting in very high consumer spending and fuelling global