denny h kalyalya : high performance leadership opening speech by dr denny h kalyalya, deputy governor of the bank of zambia, at the opening of the high performance leadership workshop, lusaka, 9 august 2010. * * * chairperson workshop facilitators from mca international directors and assistant directors other participants ladies and gentlemen on behalf of bank of zambia senior management and indeed on my own behalf, i wish to welcome you all to this important workshop, on high performance leadership, organized by our human resources department in conjunction with mca international. i commend the human resources department for taking the initiative to organise this workshop, which is intended to facilitate exchange of information and views on appropriate leadership attributes to help us enhance our performance as leaders in our respective positions. ladies and gentlemen, as you are aware, our key role as a central bank is to deliver low and stable prices and maintain financial system stability. in spite of the global economic downturn, our country is enjoying relative economic stability, with good prospects for the future following the recent and on - going significant economic transformation of our economy. due to implementation of appropriate macroeconomic policies : i. the country has registered positive real gdp growth for the past 10 years and over the last five years, real gdp growth rate has averaged 6 % annually ; ii. inflation and exchange rates developments have also been favourable. in 2006, a single digit inflation level was attained. although inflation rose to double digit levels at the end of 2008 owing to the effects of the global economic crisis, we have since seen it return to single digit levels ; iii. the financial sector has also recorded tremendous growth since the commencement of liberal economic and financial policies in the early 1990s ; and iv. equally, positive developments have been registered in the payment systems. i must caution, though. that sustaining macroeconomic stability remains a key challenge in the face of limited resources, infrastructure and financial inclusion. ladies and gentlemen, as you participate in this workshop, allow me to underscore the importance, we in senior management attach to capacity building programmes for all bank employees. i am reliably informed that during the workshop you will cover a number of important topics including the following : i. self awareness ; ii. time management ; iii. action or goals required to achieve a vision ; iv. emotional intelligence and values ; v. power to take action ; and vi. ability to manage direction successfully. i am fully aware that some of the topics that you will be dealing with may not

, some have become state - owned via rescue programme. their systemic importance has risen further along with their market power, and regulation must rise up to the challenge. the interdependence of the financial sustainability of these financial giants and sovereign risks have become increasingly linked, while perception of state guaranty of such institutions may distort local or even global markets, creating un - level playing - field. the demand for accountability for public bail - out money puts pressure on managing such banks, which have now become “ public institutions ”. thus, the intervening authorities face a strong risk of having to micro - manage the institutions, and with this the associated risks, not least reputational and legal. timely exit is important for the reason cited. exit policy however could also be complicated, for example if recovery value of bailed - out fund is under pressure from weak market conditions. most importantly, it is important to observe that, the precedence set by the actions regulators took in such intervention could have a long - term implication. we may very well be setting a new expectation, standard and text - book for bank resolution, and it may not be the standard we want to set going forward. moral hazard and time inconsistency are always difficult subjects. for financial institutions in the seanza region, many regional financial institutions, thus far unaffected directly by the crisis, are also moving into new markets, such as expanding regionally. indeed, there is some indication of search for yield, as managed funds start to flow overseas to markets which have attractive risk - return prospects, for example due to prospect of faster recovery, or due to some distortion created from implicit risk - guaranty on certain asset classes as a consequence of rescue package. in some countries, certain asset classes such as real estate may be benefiting from ample liquidity, giving rise to concern on asset bubble. all these spell potential for increased volatility and demand increased vigilance on management of risks, not only for those arising from country risk and market risk exposures, but also to exposures from counterparty and liquidity risks arising, for example, from hedging positions in otc markets. some of these risks, such as country risk, may have hitherto been marginal for regulators in emerging markets, but going forward things may change quickly. moreover, with credit - play still a very risky and expensive business, with lending subdued by low demand for loans, treasury return could be a potential profit centre, especially