Ladies and gentlemen,

I am happy to welcome you to this virtual Developing-Developed countries Dialogue Meeting held as part of the AfPI meetings on “Adapting to the Crisis –Financial Sector Supervision in times of COVID-19”.

First of all, I want to take the opportunity to thank everyone participating today for making the time to attend this meeting. This event derives from the Sochi Accord on FinTech for Financial Inclusion that calls for systematic dialogue among peers in developing and emerging countries as well as developed economies. The dialogue between regulators from developing countries and their peers from advanced economies was successfully launched last year in Prague and already contributes to the advancement of financial inclusion globally.

As you are aware, our discussion today will focus on supervision of the financial sector during the COVID-19 crisis, a topic of a high priority for policymakers globally in the current context.

This pandemic threatens our economies with challenges beyond those we have seen even during the 2008-09 global financial crisis. Unlike the financial crisis, COVID-19 has no recognition of borders of economic sectors or national borders, negatively affecting almost everyone and everywhere, leading to a slowdown of global economic activity. In 2008-09, emerging markets, notably China, were a key source of growth. However, this is not the case this time. “The last time all engines failed was in the Great Depression; the collapse this time will be similarly abrupt and steep. The World Trade Organization estimates that global trade is poised to fall by between 13 and 32 percent in 2020”.

Also unlike in 2008-09, the financial sector is not the source of the problem this time but, whilst facing stresses itself, can also be an essential part of the solution. Being socially disconnected, nowadays people and businesses are heavily relying on digital payments and financial services to maintain and restore relationships distorted by COVID-19. Central banks around the world imposed rate cuts, massive injections of liquidity, and asset purchases to strengthen the resilience of national economies and help them to recover from the crisis. The Central Bank of the Democratic Republic of Congo dropped in the key rate from 9.0% to 7.5% in order to reduce the cost of credit and brought to zero the coefficient of the compulsory reserve on deposits in national currency to increase the liquidity of banks. The Central Bank of Egypt approved a guarantee of 3 billion pounds to the Tourism Sector. In Morocco, laid-off workers have received compensation for salaries and benefits of $200 a month for those in the formal sector and $100 a month for those in the informal economy. In Nigeria, a $2.5 billion lending program has been established to support local manufacturing and other key sectors.

Mobilization of financial sector potential to cope with the COVID-19 crisis requires unprecedented policy measures from the financial regulators and policymakers. Regulators are at the intellectual forefront in the fight against the crisis – they need to forecast the crisis implications, adopt the necessary preventive measures,  ensure their proper implementation, and consider the timely unwinding or exit strategies of measures taken. Particular vigilance is necessary to appropriately make use of the flexibility which is available within the internationally agreed frameworks and standards.

However, even enlightened and smart policy measures are meaningless if they do not positively impact the lives of those most adversely affected by the crisis, through loss of livelihoods and employment opportunities.

How to solve the issue of policy transmission? What are the tools available for supervisors to fulfill their mandate during the pandemic? How to ensure both financial stability and financial inclusion goals are met? – these and the related questions should be answered today in this virtual Developing-Developed countries Dialogue Meeting in Africa. AFI MU has compiled the AFI COVID-19 Policy Responses for members appreciation of measures taken by different countries in the Network.

AFI’s Developing-Developed countries’ Dialogue Platform provides a unique opportunity to directly share and learn from practical experience, best practices, and expert opinions between AfPI members and their peers from the developed countries to strengthen financial supervision in times of the unprecedented crisis brought by COVID-19.

On this note, I will leave you to take forward your discussions and wish you fruitful deliberations. Thank you.