has been halted or even reversed. the ongoing robust expansion of money and credit reflects the still accommodative monetary policy stance and the strengthening of economic activity in the euro area. at 10. 7 %, the annual growth rate of loans to the private sector remained strong in december, although showing a slight moderation with respect to the previous month. strong growth in private sector credit reflects the continuation of the upward trend in the growth of borrowing by non - financial corporations seen since mid - 2004. meanwhile, in the context of rising mortgage rates throughout the euro area and slowing housing markets in some regions, the growth of household borrowing has shown some further signs of moderation in recent months, albeit remaining at still very high rates. taking the appropriate medium to longer - term perspective for assessing trends in money and credit growth, the latest developments confirm the continuation of a persistent upward trend in the underlying rate of monetary expansion. following several years of robust monetary growth, the liquidity situation in the euro area is ample by all plausible measures. persistent strong monetary and credit growth in an environment of ample liquidity point to upside risks to price stability over the medium to longer term. monetary developments therefore continue to require very careful monitoring, particularly against the background of a solid expansion in economic activity and continued strong property market developments in many parts of the euro area. to sum up, in assessing price trends it is particularly important to look through any short - term volatility. on the basis of today ’ s assessment, after a possible fall over the spring and summer, inflation rates are likely to increase again later in the year. risks to the medium - term outlook for price stability remain on the upside, relating in particular to stronger than currently expected wage developments. given the very strong monetary and credit growth in an environment of already ample liquidity, a cross - check of the outcome of the economic analysis with that of the monetary analysis supports the assessment that upside risks to price stability prevail over the medium to longer term. hence, we will be strongly vigilant in order to ensure that risks to price stability over the medium term do not materialise. this will support the solid anchoring of medium to longer - term inflation expectations in the euro area at levels consistent with price stability. therefore, looking ahead, acting in a firm and timely manner to ensure price stability in the medium term remains warranted. as regards fiscal policy, first indications confirm that fiscal developments in the euro area were relatively favourable in 2006 on the

caleb m fundanga : the history and experiences of the financial sector and regulatory framework in zambia address by dr caleb m fundanga, governor of the bank of zambia, at the co - operative bank capitalisation consultative forum “ the history and experiences of the financial sector and regulatory framework in zambia ”, lusaka, 3 march 2011. * * * the honourable minister of agriculture and co - operatives, hon eustarkio kazonga, m. p ; the board chairman of the co - operative bank zambia limited, mr mulilo kabesha ; members of the diplomatic corps ; distinguished invited guests ; ladies and gentlemen it is with great pleasure and privilege to speak to you at this very important consultative forum. i have been requested to speak briefly on the history and some of the experiences of the financial sector in zambia. ladies and gentlemen, as you are aware, considerable developments have been recorded in the zambia economy in general and the financial sector in particular, following the liberalization of the economy in the early 1990 ’ s. these developments include the proliferation of banks and non - bank financial institutions, which have necessitated the review of supervisory policies as well as the legal and regulatory frameworks in order re - align them to the liberalised environment. a significant development relating to the zambian financial sector was the decision to relocate the function of the registrar of banks and financial institutions to the bank of zambia from the ministry of finance and national planning where it was previously located. this decision was taken in an effort to enhance regulatory oversight of banks and financial institutions starting from the licensing stage. currently, all applicants have to be evaluated in line with relevant provisions of the banking and financial services act ( bfsa ) and international best practice such as the basel core principles on effective banking supervision. the intention is to ensure that only applicants who meet these stringent criteria enter the financial system in zambia. this is crucial for fostering confidence and stability in the financial system. mr chairman, you may be aware that in the early stages of the reforms, a number of commercial banks faced serious problems and were subsequently liquidated. the closures were in part a consequence of the reforms. the reforms also highlighted some weaknesses in corporate governance arrangements at most failed banks. however, following improvements in the regulatory and supervisory frameworks, no bank closure has been recorded since 2002 and the banking sector has recorded significant growth. the growth in the sector can also be attributed to prudent fiscal and monetary policies aimed at achieving sustainable macroeconomic stability.