in economic development. hope for a prompt recovery was dampened. the number of corporate bankruptcies increased substantially compared with the previous year. uncertainty surrounding company profits hit the stock markets with full force. as elsewhere, swiss stock prices dropped significantly amid high volatility. while the swiss market as a whole ( spi ) lost 22 % from the beginning of the year, the spi banking index weakened by 30 % and the share index of insurance companies plummeted by as much as 47 % ( as of 9 december 2002 ). what are the repercussions that banks are exposed to? the weak economy results in a deterioration in the quality of loan portfolios, and the collapse of stock prices has an adverse effect on profits. banks not only suffer losses on their own securities portfolios. the stock market slump also has an impact on earnings from commissions and services. lucrative services in investment banking, such as those in connection with ipos or mergers, are less and less in demand, and the reluctance on the part of many investors – with the resultant lower turnover – cuts into the income from commission business. in the wake of falling stock prices, profits in asset management are declining as well. this is because a part of the fees and commissions levied on the assets under management is value - or performance - based. this year, the big banks recorded profit setbacks in most areas compared with year - earlier quarters, in some cases even considerable losses. this was especially due to the poorer results from trading for own account and to a decrease in investment banking business ( new issues, mergers and acquisitions ). particularly insurance business accounted for these losses. in traditional banking business, notably in retail banking, the big banks recorded satisfactory results, however. the bis equity ratios disclosed by the big banks clearly exceed the required minimum. banks which concentrate on asset management are struggling especially with the repercussions of the poorer performance on the capital markets and costs, which have risen sharply just in the last few years. for banks primarily active in interest - earning business, economic development plays a pivotal role. as already mentioned, due to the slowdown in economic activity, a deterioration in loan quality and the resultant need for higher provisions is something this business segment must reckon with. of some 250 banks which published their half - yearly results, two - thirds saw their profits decline vis - avis the first six months of the previous year. thirteen banks even posted a loss ; the remaining banks, however, recorded a rise

. this only emphasises the critical need to conduct this enterprise survey more regularly. to this end, i wish to reiterate the bank of zambia ’ s, continued support and commitment in working in close collaboration with government and other balance of payments statistical committee member institutions in ensuring that the collection of this vital information is done on an annual basis. accordingly, it is my hope that participants at this workshop will appreciate the importance of this survey and find the results useful. distinguished guests, i am particularly happy to learn that compared to other countries in the region, the zambian team has conducted this enterprise survey in record time. it shows true commitment and dedication of the team to this project. please keep up the good work. be reminded, however, that you have established a benchmark, which can only be improved on. i have no doubt that we will sustain the record we have set within the macroeconomic and financial management institute of southern and eastern african member countries. ladies and gentlemen, i am confident that this workshop will achieve its intended objective of disseminating the findings of the survey and stimulate active participation and comments from the various stakeholders. it is now my pleasure and honour to declare this closing and dissemination workshop on foreign private investment and investor perception survey officially opened and wish you fruitful deliberations. i thank you. bis central bankers ’ speeches