be taken purely on commercial criteria, without being distorted by the provision of cheap credit or other forms of finance from the government. government induced distortions in financial markets will lead to the misallocation of resources, reducing the social rate of return to these resources. modernising smallholder farming will entail smallholders making greater use of purchased farm inputs. hence modernisation will require smallholders having better access to finance. nevertheless finance is unlikely to be the binding constraint on modernisation of smallholder agriculture and unless more important constraints are tackled, enhancing smallholders ’ access to finance will be ineffective. policy measures to strengthen the provision of financial bis central bankers ’ speeches services in the rural areas must be part of a much broader set of interventions to support smallholders to adopt modern farm technology and produce for the market, of the type i have already mentioned. unless smallholders have adopted good agricultural practises, such as the use of improved seeds, proper field preparation, timely planting, weeding and pest control, proper harvest and post - harvest handling, etc – practises which can improve yields significantly – they will not be able to utilise credit effectively because their farms will not be profitable. how should government support the development of rural financial markets? the key interventions required are to alleviate the market failures which impede the delivery of financial services to farmers. for example, it is necessary to strengthen the institutional environment for loan security to reduce the credit risks of lending to farmers. strengthening land rights to allow farmers to use land as loan collateral would help to make farmers more creditworthy. the proposed establishment of a collateral securities registry and the enactment of the chattel securities bill, which is currently before parliament, will help to widen the range of assets which are acceptable to lenders as collateral. promoting the warehouse receipt system set up by the uganda commodity exchange would also be a useful measure to support lending to agriculture. microfinance institutions ( mfis ) and savings and credit cooperatives ( saccos ) are much better suited institutionally than commercial banks to serving small farmers, but they are often constrained by managerial and technical weaknesses. hence there is an important role for government to assist mfis and saccos to strengthen their management and the professional skills of their officers. the bank of uganda is encouraging the larger tier 4 mfis to upgrade to become licensed deposit taking mdis. assisting mfis and saccos to strengthen their technical and managerial capacities so that they can mobilise funds from the

lucas papademos : opening address at the fifth ecb central banking conference speech by mr lucas papademos, vice president of the european central bank, at the fifth ecb central banking conference “ the euro at ten : lessons and challenges ”, frankfurt am main, 13 november 2008. * i. * * introduction on behalf of the executive board, i would like to welcome you to the fifth ecb central banking conference, taking place in the tenth year of the ecb ’ s establishment. we are delighted that this year ’ s conference has attracted many distinguished participants from academia, central banks, governments, international institutions and the financial sector. your contributions will ensure that this conference will provide insightful and thoughtprovoking analysis and generate debate on many policy issues of relevance to central banking. as we will be celebrating the 10th anniversary of the introduction of the single european currency in a few weeks ’ time, the theme of this conference is, of course, focused on “ the euro at ten : lessons and challenges ”. the introduction of the euro was a historic milestone in the process of european monetary, economic and political integration, with wide - ranging implications for the european and global economies. accordingly, this conference will concentrate on several issues of relevance to the performance of the euro area economy and financial system and on the challenges for the conduct of monetary policy and the performance of other central banking tasks in an increasingly integrated global economy. ii. the euro : economic performance and policy challenges the first session will examine the macroeconomic performance of economic and monetary union, its achievements and challenges, over the past ten years. there are several key questions to be addressed. first, has the euro and the single monetary policy established a zone of monetary stability as envisaged, with all the direct and indirect benefits this entails for the 320 million citizens of the euro area? the evidence unambiguously provides a positive answer. the euro has been a resounding success : it has established itself as a stable and credible currency, which has become the second most important currency in the world after the us dollar. a deeper analysis, however, should reveal the contribution of monetary policy, and of other factors, to this achievement and the challenges that lie ahead and must be effectively addressed in order to ensure the preservation of price stability in the years to come. a second key question is whether – or to what extent – the euro has contributed to boosting the trend growth of the euro area economy by strengthening competition, enhancing market efficiency