This would effectively safeguard the soundness, integrity, efficiency, and stability of the financial system in Kenya and the region. I believe SMART regulation is the way to go because its very architecture minimises regulatory burden, focuses on outcomes rather that processes, and applies regulatory measures in proportion to the risk profile of individual institutions.
SMART regulations allow regulators to enforce more efficiently and allow regulated entities to comply cheaply and reliably. 3. Stress Testing: Stress testing has become a cornerstone of prudential supervision and risk assessment across the world. The Central Bank has strengthened its capacity and has conducted banking system stress testing exercise using the Cihak Framework since January 2015.