Indeed, there is need for better regulation that can readily identify emerging vulnerabilities; properly price risks; and strengthen incentives for prudent behaviour. It is tempting after the crisis to call for more regulation – but we should emphasize better regulation. Second, we should emphasize building strong institutions.
Globally, the remedial actions taken by governments to deal with the crisis have borne fruit and the green shoots of recovery are beginning to sprout. For us here in Kenya, we remain committed to fostering a stable market-based financial system as mandated by law. An efficient financial system collects and collates deposits from micro-savers and channels them to investors. This is the intermediation process.