According to the IMF’s World Economic Outlook, global growth was projected at 4.8 percent in 2010 with Asia and Latin America experiencing strong growth. Africa was also expected to experience robust growth, but growth in Europe was sluggish whilst in the United States, it remained subdued. BIS central bankers’ speeches  1  This uneven scenario in global growth has created several downside risks, including risks to the financial sector. There is no guarantee that the problems in the financial sector have been adequately addressed, but there have been concerted efforts to ensure that they do not recur. The introduction of new rules, in particular Basel III is expected to help in this direction, as Basel III will address issues including strengthening risk coverage of capital for banks, the buildup of capital buffers and the introduction of global minimum liquidity standards. However, countries are now realizing that in addition to these new rules there is the need for better supervision and the creation of crisis resolution mechanisms. Your Excellency, distinguished guests, despite the down side risks to the global economy, there is room for optimism which stems from the progress being made to repair and reform the financial sector, including developing macro prudential approaches to limit systemic risks. Monetary policy in the developed economies should remain accommodative in order to serve as the first line of defense in the event of a future shock.
Your Excellency, distinguished guests, with the increase in the number of banks, the Bank of Sierra Leone has taken steps to ensure that commercial banks are adequately capitalized to absorb shocks and enhance their capacity to extend credit. In this regard, the Bank has increased the required minimum paid-up capital from Le15 billion in 2009 to Le30 billion over a five year period and preliminary indications are that most commercial banks have met this minimum capital as at end December 2010. Cross-border challenges Your Excellency, distinguished ladies and gentlemen, as investors extend their investment outreach across national frontiers, the Bank of Sierra Leone has in addition to signing a memorandum of understanding for information sharing last year in the WAMZ member states, has also seen the need for further action to enhance cooperation with other supervisory bodies in the sub region. To this end, Sierra Leone became a member of The College of Supervisors of the West African Monetary Zone in 2010, an institution set up to coordinate and harmonize supervisory information and practices among central banks of WAMZ member countries. At its recent meeting held in Accra, the College agreed, amongst others that:   Capacity building through training to be delivered by WAIFEM, should be central to its future operations;    A common supervisory framework for member countries should be established;    Financial Stability Reporting should be standardized and uniform; and    Regional corporate governance guidelines should be developed.