The feedback from these reviews has formed a good base for focused supervision on the sector. Further, CBK will shortly be issuing a consultative paper for review and comments on proposals to limit tenures of non-executive directors and Chief Executive Officers of banks. We all appreciate that unlimited tenures may breed complacency.
At the very least, however, we have learned that monetary policymakers should be aware of these channels and monitor a broad range of indicators, such as buoyant credit growth, increasing leverage of financial institutions and, in general, leading indicators of financial instability. Some authors argue that monetary policy should react to financial variables and more generally to leading indicators of financial distress.