ANNEXS COOPERATION AND CO-ORDINATION IN THE AREA OF BANKING REGULATORY AND SUPERVISORY MATTERS PREAMBLE The High Contracting Parties: RECOGNISING the importance of having sound banks since Banks: (a) are the principal depository for the general public's liquid funds and the safety and ready availability of these funds for transactions are: (i) the responsibility of banks' management; and (ii) essential to the stability, efficiency and soundness of the financial system; (b) employ the general public's funds to make loans and investments, thereby allocating scarce savings to productive uses within the economy and the intermediation process helps to channel funds to economic sectors that make the most efficient and productive use of funds; (c) serve as the main conduit for monetary policy implementation between the central bank and the economy; and (d) provide the backbone for the national payments mechanism and a reliable and efficient payments mechanism is an essential component in any economy. FURTHER RECOGNISING that it is important for Central Banks in the Region to co-operate in the areas of policy formulation, capacity building, systems development with a view to: 75