a common understanding arising from this debate is that financial exclusion has negative economic and social effects on society. for instance, lack of access to financial services tends to restrict the economic opportunities open to the poor and makes them vulnerable to adverse events. the absence of savings products in particular makes it difficult to build up capital. this conference is therefore, aimed at enhancing financial inclusion by equipping practitioners and regulators with tools to promote financial literacy and to expand the provision of financial services. chairperson : allow me to give some highlights of the status of financial inclusion in zambia. like in many other developing countries, the financial sector in zambia still faces a number of challenges. the joint imf / world bank, financial sector assessment programme ( fsap ) report of 2002, highlighted a number of these, including limited access to financial services by the rural and peri - urban population and doubtful sustainability of financial services in zambia. in light of these findings, and in recognition of the strategic importance of the development of the financial sector in contributing to sustainable economic growth and poverty reduction, the government of the republic of zambia developed and launched the financial sector development plan ( fsdp ) in 2004. the fsdp is a comprehensive five year strategy to build and strengthen the financial sector infrastructure to enable it to support economic diversification and sustainable growth. under the fsdp, two important studies, namely, the finscope™ surveys of 2005 and 2007, on the demand for and supply of financial services in zambia have been undertaken. these studies have augmented the earlier findings of the fsap with respect to the key developmental challenges for the financial sector in zambia. the key findings of the finscope survey on the demand for financial services included the following : • only one third ( 33. 3 % ) of the population were “ financially served ”, i. e., used formal and / or informal financial products, whilst two thirds ( 66. 7 % ) had no access to financial services ; • 77. 5 % of zambians report to have never had a bank product or service ; • 40 % of salaried staff reported not having bank accounts, signifying that they received money in cash rather than through the financial system ; and • the barriers to accessing financial services include cost, distance, time and transport to reach the bank or financial service provider. in addition, the finscope™ survey noted that microfinance institutions although used by only 5 % of the adult population plays an important role in increasing levels of

response to a monetary stimulus. this may come at a cost in the longer run, however, as price rigidity impedes the adjustment process and reduces the efficiency of monetary policy. a large part of the perceived differences between the fed and the ecb in terms of policy reactions results, in fact, from differences in price flexibility. because of specific rigidities in europe, the fall in inflation that normally follows a decline in output materialized later and more slowly. moreover, it notably happened after several governments had implemented a series of structural reforms and adjustment policies in 2010 – 2011. this explains part of the delay in implementing non - conventional measures in europe, as compared to the united states. a third challenge comes from managing the risks that low interest rates and nonconventional policies imply for financial stability. significant advances have been achieved in developing proper macroprudential frameworks and instruments for the banking sector. strong capital and liquidity requirements have increased its systemic robustness. new countercyclical tools have been developed. progress has been made towards reducing moral hazard through proper resolution mechanisms for large and systemic institutions. however, the timeliness and efficacy of macroprudential measures on specific areas of exuberance, such as real estate, are still being put to the test. more importantly, i see one blind spot. risk has not fully disappeared but rather has morphed and migrated to new parts of the financial system. specifically, maturity transformation has developed outside the banking sector and by direct market intermediation. increasingly, it is taking place through vehicles – such as open funds and etfs – that issue very short - term ( often intraday ) liabilities and invest in long - term instruments. it may be a matter of priority to develop a conceptual and operational approach to macroprudential policy that allows regulators to monitor those parts of the financial system that are currently out of reach. bis central bankers ’ speeches * * * when central banks entered into non - conventional territory, most observers saw that as a temporary incursion. for some of us, this temporary situation has lasted seven years. for the euro area, the current horizon extends, at least, until 2017. this is quite a long period. for many young people today – say, for instance, current phds students -, conventional monetary policies are a prehistoric curiosity. non - conventional is the only “ normal ” that they have experienced in their lifetime as adults. will the future look like the past or be different? this