and risk profile driven approach to supervision and regulation of the financial sector. rbs is a structured and forward looking process designed to identify risk factors to which individual banks and other financial institutions and the entire financial industry are exposed. this approach enables supervisors to critically assess various risks and the risk management systems of banks and other financial institutions in order to assess the risk profile of these institutions. it also enables the regulator to focus supervisory attention on the areas and institutions that pose the greatest risk to financial system stability. thus, the supervisory authorities are in a position to identify systemic risk factors and devise intervention measures aimed at forestalling systemic failures. the added advantage of this approach is that it brings about optimal utilisation of supervisory resources. ladies and gentlemen, i am happy to inform you that following our initial efforts dating back to 1999 to introduce risk based supervision, the bank of zambia has this year fully adopted rbs. as a result it is expected that there will be enhanced supervision of banks and other financial institutions. let me also state that the boz is committed to implementing the basel ii capital accord but stands ready to review this stance in the face of the ongoing global financial crisis. as you know basel ii is intended to make banks operate at capital levels which are commensurate with their risk profiles. to this end, the boz just issued risk management guidelines. distinguished workshop participants as i conclude, i wish to urge the workshop participants to participate actively in the deliberations and use this opportunity to tap knowledge and skills from the vast experience of the resource persons. this workshop provides us with a unique opportunity to share our respective country experiences and challenges. it is my hope that we will develop the supervisory systems in the region to a level where they will be able to interact effectively. this uniformity in the supervisory systems will prepare us to respond better to regional and global financial challenges. with these few remarks, ladies and gentlemen, it is now my honour and privilege to declare this important regional workshop on effective banking supervision : a risk based approach officially open. i thank you!!!

since there has not been any significant crisis situation in our financial system except for some non - systemic failures of a few mismanaged financial institutions in the recent past, the question raised by many local and international agencies was why the central bank came up with this financial sector consolidation programme for a well - functioning stable financial system. the past global experiences show that all the consolidation programmes implemented to stabilise the respective economies ’ financial systems were introduced as a national policy to relove a crisis situation. therefore, we have a duty to explain very clearly the factors that prompted the central bank to introduce the financial sector consolidation programme. given the time constraint, i will present the main arguments for consolidation in six points. bis central bankers ’ speeches reason 1 : rapid transformation of the domestic economy and the need for a strong and stable financial system to steer future economic growth we all know the conflict period of nearly 30 years was extremely challenging for our economy and the country. nevertheless, with the country gaining peace and returning to normalcy from may 2009, we have been able to overcome many challenges and reach greater heights in economic performance. social indicators and global rankings of our country have improved notably while regional disparities have reduced and the standard of living of the people has improved. further, in the midst of the global economic downturn and the slower than expected recovery, we have been successful in delivering an oasis of tranquillity and stability. the credit for this clear paradigm shift, elevating our economy into new heights, goes to our development strategy articulated under the “ mahinda chintana : vision for the future ”, which was first introduced in 2005 and then redesigned in 2010, aligning strategies to overcome the challenges in the post - conflict economy. our dream of transforming sri lanka into the “ wonder of asia ” is an important topic that is being broadly discussed among the academia, international agencies and many heads of governments. ladies and gentlemen, i hope most of you can remember our 60th anniversary oration series held in 2010. there, one of the eminent speakers was dr. ngozi okongo - iweala, then managing director of the world bank and former finance minister of nigeria. she spoke on the topic “ becoming the wonder of asia : accelerating the inclusive growth in sri lanka ”. she had carefully studied the development plan of the government, the “ mahinda chintana : vision for the future ” released in 2010, prepared just one year after the ending of the civil conflict. she was