similar amount may accrue to the fund. for those economies which are dependent on non - renewable resources such as oil and gas, the depletion of the countries wealth over time raises issues of inter - generational equity and fiscal sustainability. the establishment of a revenue stabilisation fund goes some way towards addressing these issues. money, credit and interest rates as you are aware our current monetary policy framework is focussed on liquidity management and exchange rate stability which is directed towards ensuring internal and external price stability – the internal and external value of the currency. liquidity conditions must be managed to ensure that business credit is not retarded especially during periods in which the public sector is a major player in the money and capital market. during 2000 private sector credit by the commercial banks expanded by 14. 5 per cent compared with a 12 per cent growth in the previous year. these developments were taking place alongside an increase of 30. 5 per cent in credit by non - bank licensed financial institutions reflecting an increase in the holdings of private sector investments. it is against this background understandably that credit growth from the commercial banks has slowed in the first few months of 2001. all components of credit fell except credit to business firms which grew by 4. 4 per cent in the first two months of the year. nonetheless private sector credit as a percentage of gdp remains at around 38 per cent of gdp around the same levels as were evident in 1999 and 2000. over the past several years many businesses relied on overdraft financing as their preferred method of business finance. the high cost of financing these operations, the imperative for many firms to be internationally competitive, the improved economic climate and the generation of internal sources of funds ( retained earnings ) suggests that more business firms may wish to change the nature of their business finances as they begin to generate more internal funds and begin to make more use of the domestic capital market. cash reserve requirements for commercial banks the growth in credit over the past two years has taken place against the backdrop of a growing economy, large fiscal injections, a prime rate of 16. 50 per cent and a cash reserve requirement for commercial banks of 21 per cent of designated liabilities – that is deposit liabilities and other fund - raising instruments. at 21 per cent the cash reserve ratio for commercial banks is relatively high and indeed represents high intermediation costs. the central bank is committed to lowering the cash reserve requirement over the medium term especially as the bank moves away from a reliance on direct instruments of control

rate, directly lowers the funding conditions of banks and thereby compensates part of the costs that banks accrue by not being able to pass on negative rates to some of their customer base. effect of negative policy rates on bank risk - taking a second concern is the effect of negative policy rates on banks ’ risk - taking behaviour, induced by a search for yield. a number of recent studies investigate the risk - taking behaviour of banks in an environment of negative policy rates. for example, heider, saidi and schepens ( 2019 ) show that the introduction of negative policy rates by the ecb induced high - deposit banks to incur more risk by lending to borrowers with a larger return - on - assets ( roa ) variation than low - deposit banks ( chart 12 ). but even though the borrowers of high - deposit banks show a higher volatility of returns, they exhibit lower levels of leverage and the same level of profitability as the borrowers of low - deposit banks. in a similar vein, bubeck, maddaloni and peydro ( 2019 ) investigate how negative policy rates affect banks ’ investment choices in their securities portfolios. the authors find that high - deposit banks tend to increase their holdings of high - yield securities in an environment of negative deposit rates, especially relative to low - deposit banks ( chart 13 ). these searchfor - yield effects are stronger for less capitalised banks, which could raise concerns for financial stability. bittner et al. ( 2020 ) also consider the real economic effects of negative rates. on the basis of credit register data, they provide empirical evidence that the borrowers of high - deposit banks in germany, where the pass - through of negative rates is limited, are riskier but that they increase investment and employment more strongly after receiving credit, thereby supporting monetary transmission to the real economy. it is precisely through such effects that higher risk - taking by banks may be a feature rather than a bug, as long as it does not raise financial stability concerns. a longer - term perspective in spite of the overall positive assessment of the ecb ’ s experience with negative interest rates, a persistent period of negative rates may pose additional challenges. it cannot be taken for granted that negative effects on bank profitability from depressed profit margins can be compensated by lower loan - loss provisions also in the future. research based on a broad sample of pandemics by jorda, singh and taylor ( 2020 ) suggests that pandemics were