accumulation of inventories of durable and capital goods and the ensuing large - scale reduction in production to adjust the level of inventories, exports of automobiles, electrical machinery, and general machinery – industries in which japan excels – declined in an unprecedented manner. accordingly, production declined considerably. the factor behind the sudden contraction of financial and economic activities on a global basis, including japan, was an accumulation of various excesses during the mid - 2000s, particularly in the united states and europe, and the adjustments of the balance sheets of firms and households emerged in the process of the unwinding of excesses. during the mid2000s, the world economy constantly registered unprecedented high levels of growth at around five percent. despite this high growth rate, prices continued to be generally stable, and accommodative financial conditions continued for a long time around the world. the continued benign environment of high growth, low inflation, and accommodative financial conditions led to the prevalence of optimism for the future ( which in retrospect is hard to believe ). meanwhile, overconfidence also spread in the sophistication of financial technologies that were developing remarkably at the time. in those circumstances, imbalances such as the increase in credit and leverage as well as the rise in asset prices accumulated worldwide. developments since last autumn can be described as essentially the adjustment of the accumulated imbalances ; in other words, the bursting of a global credit bubble. nevertheless, world economic conditions have been showing signs of leveling - out since the spring of this year. that is because the global financial markets have gradually started to stabilize because the provision of ample liquidity by central banks around the world, the aggressive public capital infusion and debt guarantees by the governments for u. s. and european financial institutions, have dissipated market participants ’ extreme anxiety. the progress with inventory adjustments on a global basis due to large reduction in production, and the manifestation of the effects of large - scale economic stimulus measures implemented around the globe have also contributed. thanks to such developments, a positive trend has been emerging in japan's economy. exports and production have been recovering, especially in the automotive and electronic parts industries. fiscal measures including public investment have also been underpinning economic activity. as for the economic outlook, the upward momentum in the world economy is likely to continue for a while. the recent clear recovery of emerging economies is a reassuring factor. against this background, japan's economy is expected to start recovering from

banking industry, standard charted bank uganda was the first bank to introduce atms in the country, visa electron debit cards, toll free phone banking and other innovations. it was also one of the first banks to be licensed to trade government securities as a primary dealer and the first to offer derivative products in uganda. with these achievements in mind over the years and given the recent amendments to the financial institutions act, 2004, which allowed banks to engage in islamic banking, agent banking and bancassurance ; enormous potential for innovation, growth and financial inclusion in uganda ’ s formal financial sector remains. in the african region, standard chartered bank has a strong foot print and its existence in the region raises important aspects of cross border banking relationships between home and host regulators. one important aspect i wish to highlight is the resolution of cross border banking entities. i want to draw your attention to the recent closure of a kenyan bank, which had a subsidiary in uganda. the closure highlighted a few challenges in the winding up of parent banks while the subsidiary remains operational. consequently, to ensure uninterrupted business continuity of the subsidiary at all times, bank of uganda issued a directive to all commercial banks to install in - country primary data centers and disaster recovery sites. we trust that scbu is fast tracking the implementation of the data center and disaster recovery site and that the prudential regulation authority will strongly encourage standard chartered bank plc. to ensure that its subsidiary fully complies with this directive. turning to the purpose of today ’ s agenda, supervisory colleges provide avenues for enhancing information sharing among supervisors, facilitate common understanding of risks in financial groups, promote a shared agenda for addressing risks and vulnerabilities, contribute to improved crisis preparedness and provide a platform for communicating key supervisory messages among college members. addressing emerging vulnerabilities such as unintended consequences of implementing global standards and rules like anti - money laundering and anti - terrorism financing mechanisms will require concerted information sharing that such supervisory colleges can support. however, these colleges are not a substitute for effective national supervision nor should they undermine the legal and prudential responsibilities of the respective supervisors. supervisory colleges should, instead, provide a framework to enhance effective supervision of international banking groups on a consolidated and solo basis and inform decision making in this regard. the bank of uganda, on its part, trusts that the deliberations at this particular college will achieve the afore - mentioned benefits and facilitate further understanding of the role that standard chartered bank plays in the