After rising initially with the substantial costs associated with bank recapitalization programs, in recent years public debt ratios have generally been declining as a share of GDP. Monetary policy regimes have become more mature, with some progress toward greater de facto independence for central banks, with clearer mandates for price stability. Exchange rate regimes in the crisis countries have become somewhat more flexible, providing greater scope for monetary policy to sustain the domestic conditions for price stability. Financial systems are substantially stronger. Bank capital ratios now provide a significantly larger cushion against potential losses – though capital ratios in Asian banking sectors are still generally lower than those in other emerging economies. The quality of bank assets has improved. Nonperforming loans, estimated to have peaked at between one-quarter and three-quarters of total loans in the crisis countries, are now under 10 percent of total loans. Financial institutions that required government intervention have largely been restored to private ownership. Domestic capital markets  2  BIS Review 65/2007  are an increasingly important channel of intermediation in financial systems that had historically been dominated by banks. These are impressive achievements by any measure. And the changes that have taken place provide a strong foundation for future growth and they make it much less likely that these economies will be vulnerable to the type of crises of a decade ago. This progress is reflected in a broad range of financial market indicators of risk. Risk premia in domestic interest rates markets are low.

Denny H Kalyalya: Expansion of Zambia’s banking sector Remarks by Dr Denny H Kalyalya, Deputy Governor-Operations of the Bank of Zambia; at the official opening of Bank of China’s new premises, Lusaka, 9 December 2008. *  *  *  • Honourable Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, MP; • His Excellency – the Chinese Ambassador to the Republic of Zambia; Mr. Li Qiangmin; • Managing Director of the Bank of China (Zambia) Limited; Mr Du Qiang; • Distinguished Invited Guests; • Ladies and Gentlemen. I am greatly honoured for having been invited to speak on the occasion of the official opening ceremony of Bank of China’s new premises. Ladies and Gentlemen As part of the on-going Zambia-Chinese relationship, the Bank of China was established in 1997. Since then the Bank has recorded tremendous progress. Distinguished Invited Guests During the past 8 years, the overall financial performance and condition of the banking sector has been satisfactory. The sector has continued to expand and we anticipate increased economic and investment activity in the period ahead. Banks are expected to continue to provide the required level of finance to consolidate the economic gains registered so far. The Bank has achieved tremendous growth since its inception in 1997. During the last eleven years, total assets have increased by 325% to K507.9 billion in October 2008 from K13.8 billion in December 1997. Regulatory capital increased by about 1,000% to K41.9 billion in October 2008 from K3.8 billion December 1997.