. notwithstanding these positive developments, there has been a marked increase in customer complaints, mostly emanating from the banks ’ pricing structure, especially on commissions, fees and service charges. given the prevailing liberalised economic environment, interest rates are determined by the market. although we have seen significant improvements in the macroeconomic indicators, the levels of interest rates still remain high. this is a major concern to the bank of zambia and we have continued to engage banks through the bankers association of zambia on this issue. ladies and gentlemen, it is worth mentioning here that one of the challenges that banks continue to face is the high levels of non - performing loans due to poor credit culture amongst some borrowers. it is therefore important that credit worthy customers are distinguished from high risky borrowers in the banking sector. the bank of zambia through the financial sector development plan has in this regard established the credit reference bureau. the credit reference bureau will enable lenders to make decision based on information specific to each borrower ensuring that risk assessments of potential borrowers are not affected by the habits of other borrowers. therefore, the pricing of risk will be more reflective of borrower ’ s particular circumstances. further, the bank of zambia has made it mandatory for banks and other financial service providers to use the credit reference bureau before a loan is provided to any customer. consequently any loans approved without passing through the credit reference bureau will attract regulatory action. the bank of zambia also places great importance on the need to have knowledgeable consumers who play a key role in creating a competitive and fair business environment. to this end, the bank promotes consumer awareness and financial literacy by disseminating information through quarterly media briefs, road shows, and attendance at annual agricultural shows and trade fairs. the bank of zambia also consolidates tariff guides of all deposit taking financial institutions and publishes this information in a form suitable to make immediate and easy comparisons. the purpose of this quarterly publication is to enable customers shop around in order to get value for money from services provided by banks and to cause banks to be competitive in the manner they set fees and charges. further, through the activities of the financial sector development plan, the boz intends to spearhead the development of a national financial education strategy in order to galvanise the efforts of various stakeholders in the delivery of financial services. the bank also publishes a lot of information on the banking sector and the economy in general on its website www. boz. zm. i wish to urge all consumers who may have access

of rule be employed? the 1970s and early 1980s provided important real data and experience in the resolution of these questions. friedman and phelps had already long argued that there was no long - run trade - off and that attempts to reduce unemployment below some structural level by accepting higher inflation would simply result in accelerating inflation and no lasting gain on unemployment. the 1970s seemed to demonstrate that this was right. more strident derivatives of the chicago tradition, however, which insisted that there was not even any short - term trade - off, were found to be wide of the mark. money did seem to matter, since the big rise in inflation in the 1970s had been preceded by a large increase in money growth. a lot of people not only accepted that monetary quantities were the key thing to look at, but concluded that central banks had failed to control them, so that some sort of step away from unconstrained discretion towards monetary rules was advisable. as a result, targets for those quantities were adopted, including in australia. that was the language of discussion when i was a student and when i first started work at the reserve bank in 1980. 1 these days, we have inflation targeting, an arrangement that provides a measure of constrained discretion to the central bank within a medium - term framework. it emphasises the control of inflation over time, but does not seek to fine - tune inflation over short periods. that allows a reasonable accommodation for trends in economic activity and employment over periods of a year or two, about which the reserve bank is required to have concern by its charter as well as by common sense, but preserves the value of the currency over the long run. in the language of trade - offs, this system accepts there is a short - term growth / inflation trade - off, but also accepts there is no long - term one. inflation targeting does not ignore financial quantities, but does not elevate them to the status of an intermediate target and does not see them as an instrument. inflation targeting is not perfect and, on occasion, still leaves policy - makers with some quite difficult decisions to make. it is, however, the best system that has been devised as yet. the fiscal debate of the 1970s was dominated by the budget deficits of the period, and the need to reduce them. on contemporary figuring, the commonwealth ’ s budget deficit reached about 4 - 5 per cent of gdp in the middle years of the decade. using figures comparable to those in use today, which measure the underlying cash