in ssa is debatable. in any case, donor aid is becoming less important as a source of budget funding for the frontier markets. there are also drawbacks to long term imf involvement in ssa which should not be underestimated. in particular there are political costs. imf conditionalities generate resentment in ssa because they are perceived as an affront to national sovereignty. for countries which only gained independence less than 50 years ago this sentiment is understandable. while policy conditionalities can be considered a necessary evil for countries which need to borrow from the imf, it is hard to justify them politically when no borrowing from the imf is needed. unfortunately this means that many sound economic policies become tainted by association with unpopular conditionalities, which makes a rational debate about economic policy harder to conduct in developing countries. if the imf was not perceived to be imposing economic policies on a sovereign state, it might find a more receptive audience for the policy advice it provides through the article iv consultations or technical assistance missions. withdrawing from long term engagement through non lending programs would allow the imf to re - focus on providing emergency liquidity support to ssa countries facing bop crises. if the external economic environment remains volatile, it is likely that there will be many instances where individual ssa countries will need temporary assistance to support their bop. the imf should work to strength its modalities for extending emergency liquidity assistance, so that it can be provided more rapidly and flexibly whenever the need arises. the imf should collaborate with other international and regional financial institutions, such as the african development bank, to put in place an effective liquidity support mechanism to meet the needs of ssa countries. references brixiova, zuzana and ndikumana, leonce ( 2010 ), “ supporting africa ’ s post crisis growth : the role of macroeconomic policies ”, working paper 117, african development bank. calvo, guillermo a. and reinhart, carmen m. ( 2002 ), “ fear of floating ”, the quarterly journal of economics, vol 117, pp379 – 408. international monetary fund ( 2008 ), “ the role of the fund in low income countries ” background paper. international monetary fund ( 2010 ), sub - saharan africa regional economic outlook, october. kasekende, l. brixiova, z and ndikumana, l. ( 2010 ), africa : africa ’ s countercycl

and rising asset prices. all this came against a background of light - touch regulation. the financial crisis has led to much - needed and far - reaching reform of the regulatory framework and a redesign of the supervisory architecture. but while we may have left the ‘ old normal ’ behind us, the “ new normal ” is still surrounded by substantial uncertainty. i see three challenges or drivers of change in the banking sector that will ultimately influence the shape of the “ new normal ”. opinion of the european central bank of 12 january 2016 on a tax for certain financial institutions ( con / 2016 / 1 ). bis central bankers ’ speeches first, the current economic environment poses a challenge to banks ’ business models and their profitability. abundant savings are not sufficiently absorbed due to timid investment activities of cash rich corporates. at the same time households and governments still need to repair their debt - contaminated balance sheets. moreover, although very low to negative interest rates aim at stimulating investment and consumption, a ricardian reaction cannot be excluded, i. e. households are hoarding even more as they need higher saving ratios to build up the same amount of wealth over the same time span. for some banks, a particular challenge is compounded by a legacy issue, namely nonperforming loans ( npls ), which remain a serious obstacle for these banks to provide new credit to the real economy, and a more general impediment for some banking sectors. second, banks face increasing competition from other actors in the market for financial intermediation. these actors include peer - to - peer lenders and technology firms offering financial services, but also to some extent insurance companies or investment funds. while more competition is surely welcome, market funding should complement, not replace, the role of banks in financing the economy. but further consolidation in the banking sector could improve its overall profitability by increasing cost and revenue synergies, thus make banking more competitive again. third, banks are confronted with potentially disruptive technologies such as distributed ledger technology ( dlt ) in the payments field. a distributed ledger is essentially a database that is shared across a network to record and validate transactions in different locations. as with all innovations, this new technology brings both challenges and opportunities. while it could increase pressure on some bank activities, dlt also has the potential to lower backoffice costs significantly and make market infrastructures more resilient and efficient. as i highlighted in a speech in frankfurt in april 2, i see three