• third, all countries are involved in this fight, and there are no winners if illicit financial flows are not dealt with. it is noteworthy that the financial sector is the most common conduit for illicit financial flows. this is largely attributed to the interconnection between national and international financial united nations sustainable development goals ( september 2015 ). available at : https : / / sustainable development. un. org /? menu = 1300. global financial integrity ( 2010 ) illicit financial flows from africa hidden resource for development. available at http : / / www. gfintegrity. org / storage / gfip / documents / reports / gfi _ africareport _ web. pdf. stop it! track it! get it! report of the high level panel on illicit financial flows from africa ( 2015 ). available at http : / / www. uneca. org / sites / default / files / publicationfiles / iff _ main _ report _ 26feb _ en. pdf. bis central bankers ’ speeches systems, which can thereby provide a wider geographical reach through which illicit financial assets are moved and laundered. the financial sector, therefore, has to be at the forefront of the agenda to stem illicit financial flows. nevertheless, in order to develop and implement policies that would appropriately address the issue of illicit financial flows it is important to appreciate the vulnerabilities of african financial systems. more importantly, to understand how they enable or facilitate the movement of illicit financial flows. most of our economies are characterized by the presence of informal financial systems that are primarily cash based. however, significant gains have been made in increasing the level of financial inclusion, most notably in sub - saharan africa, where countries like kenya and tanzania have embraced mobile and financial products and services. but the overall level of financial inclusion in africa remains low. only a small percentage of the population has bank accounts, and the percentage of those owning insurance policies and securities is even lower. this is relevant given that it serves to hamper efforts to trace illicit financial flows from the continent. weak banking regulatory and supervisory frameworks has largely hindered the effective implementation of initiatives aimed at reducing illicit financial flows from africa. this is reflected at the national level, given that most african countries are yet to fully adopt and implement the 2012 financial action taskforce ( fatf ) recommendations, the international standards on combating money laundering and the financing of terrorism. the fatf standards are a comprehensive framework of preventive measures

some insights to this process of integration. ladies and gentlemen : anti - money laundering ( aml ) and combatting the financing of terrorism remains a challenge to us all. the heavy cash - based nature of the east african economies, civil conflicts and porous borders make the region particularly vulnerable to money laundering and financing of terrorism. however significant progress has been made across the region in strengthening aml / cft regulatory regimes particularly with the support of the eastern africa anti - money laundering group ( esaamlg ). the growth of mobile phone financial services across the region will also significantly reduce the risk of aml / cft with the tractability of mobile phone financial transactions and reduction of usage of informal financial services. let us all agree that it is the informality of financial markets that will allow bad regimes of aml / cft to thrive – we need then to formalize markets. kenya and tanzania have been incorporated in the financial action task force ( fatf ) public list of countries with deficiencies in their aml / cft legal and regulatory frameworks. bis central bankers ’ speeches uganda has recently been added to this list. significant progress has been made in both kenya and tanzania in enacting and implementing the requisite aml / cft regimes. nairobi is also this week hosting the fatf regional review group meeting for middle east and africa that will review progress made in kenya and tanzania in addressing aml / cft deficiencies. i am sure that we will continue to strengthen our aml / cft regimes across the region given the strong political commitment and support from government, the private sector and the general public. i expect that this summit will also generate practical recommendations on how aml / cft regimes across the region can be strengthened. ladies and gentlemen : as i draw to a close, i urge you to draw from the varied experiences of the high calibre facilitators and participants in this forum to come up with recommendations that will enhance the east african financial markets ’ governance, risk and a policy convergence environment. this will in turn enable our envisaged regional financial markets to attract the capital that is required to finance the eac ’ s ambitious development agenda and also leave no room for informal financial markets to thrive. it is now my distinct honour to declare this summit officially open. thank you. bis central bankers ’ speeches