Within Kuwait, we also engage closely with different government institutions such as the Capital Markets Authority, the Ministry of Commerce and Industry and the Communication and Information Technology Regulatory Authority. And finally, the CBK is focused on continuous capacity building to ensure the development and sustainability of our team and to provide technical support to the industry. Through the Kuwait Institute of Banking Studies (KIBS), we are supporting sophisticated programs tailored for specific areas of focus to equip our teams as well as the banking industry with the latest tools and know-how. KIBS is playing a critical role in promoting capacity building in Kuwait, having provided training to over 4,700 banking staff in the last year alone. I am delighted to announce the launch of the “Kafaa” initiative, in collaboration with the Kuwait Institute of Banking Studies and Kuwaiti banks. Kafaa provides advanced  Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 18 -  programs to financial sector employees including post graduate studies, cybersecurity, risk management, Shariah audit, etc. In addition, we are proud that Kuwait hosts and sponsors the IMF’s Middle East Centre for Economic and Finance (CEF), that provides training for candidates from across the Arab world. Last year, 1,477 candidates benefited from programs run by the Centre, at a total cost of $ million. With the support of enabling institutions such as educators and regulators, the banking industry can transform itself for the future and play its rightful role in supporting inclusive, sustainable prosperity.
We need to ensure that intermediaries build, over time, stronger capital and liquidity cushions, especially for trading activities. The Basel committee has been very active and currently is devising proposals. But our main priority is to reduce procyclicality in our financial systems. Stronger capital and liquidity cushions must be built in good times and drawn down in bad times. The essential contribution however will come from a change in our provisioning rules. The objective is to build automatic and “through the cycle” stabilizers in a transparent way and according to a rule based system. I believe there is a lot to learn from the Spanish dynamic provisioning approach. Finally, nothing will work if we do not address the issue of incentives. In a market based economy, incentives determine the behaviours of agents. Regulators must aim at creating an environment that is conducive to both efficiency and stability and that can avoid excessive risk taking. This is why compensation practices are so important. They should be structured so as to induce appropriate risk behaviour and encourage "true" financial innovation. Competition between financial institutions in hiring staff creates a coordination problem and leads to many excesses, acknowledged by the institutions themselves. Compensation policies should therefore be guided by clear and internationally agreed rules covering: (i) the involvement of senior management in traders’ compensation policies, (ii) detailed disclosure requirements, (iii) clear and direct links between the payment of bonuses and the longer term profitability of institutions, i.e.