excess cyclicality arising from the minimum capital requirements. 12 measures concerning the role of external ratings and the treatment of securitisation have also been announced. better risk coverage is also needed, which is capable of capturing major on and off - balance sheet risks and derivative - related exposures. various proposals have been formulated in this regard, including : strengthening the capital requirements for counterparty credit risk exposures arising from derivatives, repos and securities financing activities ; a leverage requirement ( capital divided by total exposure ) to put a cap on the level of leverage in the banking sector ; and internationally harmonised global liquidity standards, including a liquidity coverage ratio and a structural ratio ( measuring the amount of longer - term stable funding sources to cover the liquidity needs for funding assets over the period of one year ). finally, governance of financial institutions must be strengthened, for instance with regard to remuneration incentives. 13 the regulatory community is well aware of the fact that the reform must be introduced in an ordered manner in order to ensure the resilience of the financial system as a whole, while also supporting economic growth over the longer term. the proposals are currently the subject of extensive consultations with the banking system. in addition, an impact study will be conducted to assess the implications of the various measures. based on the outcome thereof, the aim is to arrive, by the end of 2010, at an appropriate calibration for the new requirements in terms of the level and quality of capital, in order to find a balance between financial innovation, financial stability and sustainable economic growth. the basel reform will be phased in gradually as financial conditions improve and the economic recovery strengthens, with the aim of implementation by the end of 2012. appropriate grandfathering arrangements will be put in place in order to ensure a smooth transition. a further point highlighted by the crisis is the availability of resolution schemes that allow for speedy and decisive interventions in the event of bank failures or near - failures, averting deposit runs and limiting contagion effects on the wider banking system. several initiatives in this area are under way both at the european and global levels. 14 the potential role of capital regulation ( basel ii ) in amplifying credit cycles is being investigated by a number of authorities and institutions, including the basel committee and the ecb. the consultative document issued by the basel committee on 17 december 2009 already includes proposals on : ( i ) mitigating the cyclicality of the minimum requirement ; ( ii ) introducing forward -

caleb m fundanga : bringing new levels of efficiency to the zambian banking sector through technological innovation speech by dr caleb m fundanga, governor of the bank of zambia, at the launch of the zanaco bill muster, lusaka, 27 june 2006. * * * • managing director – zambia national commercial bank plc • senior management staff from zanaco present • members of the press • invited guests • ladies and gentlemen it is my honour and privilege to be invited to officiate at this breakfast press briefing on the launch of the zanaco bill muster product. i am informed that the zanaco bill muster is zanaco ’ s latest product innovation. the product will enable the bank ’ s customers to pay their utility bills at any zanaco branch and utility companies will receive their collection details electronically online in real time. i am further informed that the new product will make it possible for the bank ’ s customers to pay for their utility bills by filling in a form instructing the bank through internet banking. the product we are launching today is indeed a positive development as it should bring new levels of efficiency to the banking sector and set a precedence for other players on the market to emulate. at bank of zambia, we sincerely support this type of innovation, especially if such a product helps in reducing the cumbersome use of paper and tedious work of manual transmission of payment instructions. ladies and gentlemen, you will agree with me that automation of processes brings in some efficiency which should translate into effective utilisation of resources. instead of spending time processing bulk payments, employees will have time to concentrate on other more important assignments, such as deposit mobilisation, credit portfolio growth and administration, all of which are important for the wellbeing of an institution in terms of profits, enhanced shareholder value and growth of the economy at large. the world is changing in terms of technological advancement and new methods of doing business are being developed every day. as a country and through innovations like the product we are launching today, we need to constantly keep up with these developments. ladies and gentlemen, as you are aware the government continues to give tax and other incentives for institutions and individuals importing computers and computer parts. this is deliberate. it is aimed at stimulating economic growth and as such we all have no excuse for not taking advantage of this development. we expect all commercial banks in zambia to take full advantage of this for the benefit of the zambian people through improved service delivery. in this