It is targeted at raising the bar of professionalism and integrity of participants in the money and foreign exchange markets. In line with the focus of many prudential regulators worldwide, the next phase of our efforts in strengthening corporate governance includes enhancing our supervisory toolkit to effectively address culture. Beginning 1 January 2018, the Bank will also be introducing a strengthened transparency framework for our enforcement actions, to serve as a deterrence against misconduct. At the same time, we have to be realistic. There is only so much regulation and supervision can achieve. Firstly, because enforcement actions are ex-post, occurring only after a finding of misconduct. Secondly, because not everything unethical is illegal. Morality cannot be legislated. The spirit of the law may be violated even when the letter of the law is kept. As such, while public sector efforts are necessary to ensure minimum universal standards, the values for the financial sector are ultimately solidified by private sector forces. In particular, professional bodies have a crucial role to play. This role includes – but is not limited to – promoting competence within the financial sector. Beyond training, these organisations are uniquely positioned to build for financiers, a sense of pride and societal purpose toward their vocation. The Asian Institute of Chartered Bankers (AICB) is making substantial progress in this direction for the banking profession. I am pleased to note that its flagship Chartered Banker curriculum dedicates a significant emphasis on professional ethics.

Distinguished participants, the rapid growth of Islamic finance raises a series of important questions, such as whether Islamic finance should be regulated differently from conventional finance. Because modern Islamic finance is relatively new to most countries, rules for financial accounting, bank governance, and lending standards are continually evolving as business practices become more refined. BIS central bankers’ speeches  1  Ladies and gentlemen, you may wish to note that since October 2008, when the Bank of Zambia hosted the first ever Islamic Banking Conference here in Lusaka, work has been ongoing to develop a regulatory framework for Islamic banking. The Bank has held several consultations both internally and externally and has also subjected the Islamic Banking framework to expert review by internationally renowned Islamic banking experts. The framework is now in its final stages and is expected to become operational before the end of the year. We are aware that the financial sector has waited for so long to start offering Islamic banking products and services. As a central bank, we assure you that the regulatory framework is receiving active attention and the market will be informed once all the formalities have completed. Ladies and gentlemen, although the Muslim Community constitutes only an estimated 12 per cent of Zambia’s population, the community constitutes high value businessmen who control a very significant share of the Zambian economy in various sectors. Their exclusion from the financial sector therefore, has significant impact on the Bank of Zambia efforts on financial inclusion.