The latest stress tests indicate that the banking system can withstand shocks. As the current credit expansion cycle gains momentum, BoU remains focused on maintaining strong supervision to ensure that banking sector loans and advances do not drastically worsen if the economic growth momentum unexpectedly slows down.
Although bank supervision and regulatory structures broadly follow international best practices, BoU has stepped up the strengthening of commercial banks’ financial reporting, internal controls, and governance. Weaknesses in  Page 3 of 5  these areas were at the core of the most recent commercial bank failures. Despite strong economic performance since the early 1990s, Uganda’s financial sector remains shallow.