but a recent survey of cfos by deloitte hints at the for example, see sharpe s and gustavo suarez ( 2013 ), “ do cfos think investment is sensitive to interest rates? ”, feds notes, 26 september. available at < http : / / www. federalreserve. gov / econresdata / notes / fedsnotes / 2013 / do - cfos - think - investment - is - sensitive - to - interest - rates - 20130926. html >. bis central bankers ’ speeches same conclusion. the survey results suggest that hurdle rates of return on new investment are typically above 10 per cent and sometimes considerably so ( graph 11 ). the results also suggest that the average margin between the hurdle rate of return and the weighted - average cost of capital is about 3 percentage points. as part of the survey, firms were also asked how often they changed the hurdle rate, with the most frequent answer being “ very rarely ”. these findings are very similar to those reached through the bank ’ s own extensive business liaison program. one issue that this raises is what is the appropriate hurdle rate of return in a world of persistently low interest rates? each cfo will no doubt have a different answer to this, but in a world of persistently low interest rates, it may well turn out that the average answer is – or should be – lower than it used to be. recently, in a number of countries there has been a tendency for firms to return funds to shareholders. these firms are effectively saying to their shareholders, “ here, you manage the money, as we do not have investment opportunities that satisfy our internal rate of return. ” in many cases, shareholders have welcomed this, seeing it as a disciplined approach to capital management. the difficulty is that if the majority of firms act in this way, shareholders in aggregate get left holding the cash. and, on that cash, they earn very low rates of return – almost certainly lower than the rate of return that would, on average, be earned if that cash were invested by businesses in real assets. this is really just another way of saying that if the appetite for investment is low, savers, in the end, will get low returns on their savings. so, as i said, this world of low interest rates is creating many challenges for you as cfos – whether you are a cfo needing to fund future liabilities, a cfo valuing and managing assets or a cf

fundanga : islamic banking – building partnerships for development opening remarks by dr caleb m fundanga, governor of the bank of zambia, to the islamic banking conference “ building partnerships for development ”, lusaka, 20 october 2008. * * * the guest speaker, mr. ahmad zaini bin othman chief executive officers of banks and non bank financial institutions ; distinguished invited guests ; colleagues ; ladies and gentlemen ; on behalf of the bank of zambia and indeed on my own behalf, i would like to extend a very warm welcome to you all to this important conference on islamic banking. to our guest speaker, mr ahmed zaini othman, i wish to extend a special welcome to you to zambia and in particular to lusaka, the capital city. like the rest of zambia, lusaka is a city of tranquility with an easygoing african charm. the city is not short of interesting sites and places to visit. i therefore urge you to find time or indeed stay an extra day or more to sample this special menu that lusaka offers. i also wish to extend my sincere thanks to standard chartered bank zambia plc, the islamic council of zambia and the eastern province chamber of commerce and industry for graciously accepting to make presentations at this conference. ladies and gentlemen, the bank of zambia is honoured and delighted to host the first islamic banking conference in zambia that begins today, the 20th and ends on 21st october, 2008. this conference on islamic banking could not have come at a more opportune time than now, when the financial sector in the country is called upon to widen financial inclusiveness. banks and non - bank financial institutions are being encouraged to increase availability of, and access to financial services to the population through the design of new and affordable products. it is through conferences and fora of this nature, among other events, that bank of zambia endeavours to disseminate information and share experiences with stakeholders about the importance of developing the financial sector. ladies and gentlemen, the last few decades have witnessed a rapid growth in islamic banking both in terms of size and the number of players. islamic banking is currently practiced in more than 50 countries worldwide. in some countries only islamic banking is allowed while in others islamic banking coexists with conventional banking. islamic banking is not limited to islamic countries. in august 2004, for instance, the islamic bank of britain became the first bank licensed by a non - muslim country to engage in islamic banking. according to recent industry estimates, islamic banking is set to