This is made possible through improving the bank’s risk management capabilities, through better stress-testing of their market positions against possible adverse price movements. Also to review the role of credit-rating agencies in the financial system. It is therefore gratifying to note in this regard that the recent passage of the Finance Act, 2008 has increased the minimum core capital for banks to Kshs.
one billion by the end of 2012. This measure we believe will strengthen the banking sector further and enable it withstand periodic local and global turbulences. We are currently engaging banks whose core capital is currently below Kshs. 1 billion on their capital build up plans. Secondly there is need to undertake reforms in the Capital Markets to restore investor trust and confidence.