in livingstone from 5 to 7 march 2004. during the meeting, zibac members and the private sector, represented by the zambia business forum ( zbf ), applauded the bank of zambia and the government for achieving relative stability in the macroeconomic environment. this is reflected in the relative stability in the exchange rate and the downward movement in interest rates for which the weighted treasury bill yield rate entered the single - digit region by early march 2004. this trend is due to, among other factors, the reduced government borrowing from the financial system and indeed your cooperation as banks, especially those that have responded by appreciable adjustments in their base rates. the other aspect was that of inflation, which slowed down to 17. 2 % in december 2003 from 26. 7 % in december 2002 and the further fall to 16. 8 % by february 2004. accordingly, calls were made for the bank and the government to continue with the efforts to stabilise the macroeconomic environment, since stability is one major consideration in investors ’ decisions for investment destinations. while zibac and zbf members commended commercial banks for positively responding to the bank of zambia and government actions by reducing lending rates, they pointed out that the cost of borrowing for the productive private sector was still high and that there was need to further lower lending rates so as to make loans affordable. in addition, low lending rates would improve the investment climate in the country. 4. outlook the march 2004, inflation pressures were anticipated to slow down. factors for this anticipation include the following : • given that the supply of fresh foodstuffs from the 2003 / 2004 agricultural season had started, inflationary pressures were likely to ease. coupled with the lifting of the fishing ban in march 2004 and expected increase in the supply of fish on the market, these factors were expected to dampen food inflationary pressures ; • the slow growth in broad money in january 2004 and the decline in average reserve money at end - february 2004 were expected to have a dampening effect on non - food inflation in march 2004 ; • the exchange rate of the kwacha against other currencies was expected to remain relatively stable on account of improved foreign exchange supply on the market arising from favourable export receipts due to higher metal prices and increased non - traditional earnings especially of sugar, cotton lint, burley tobacco and cement ; and • government expenditure was expected to be within the targeted levels and this was expected to contribute to ensuring that net domestic financing of government from the banking system

knowledge of supplementary pension schemes ; to highlight the flexibility they are given in using the different forms of saving, particularly as regards the right to transfer their accumulated position between schemes and to obtain advances in case of exceptional needs, such as the loss of their job, the purchase of a house or serious illness. the finance law included a specific appropriation for information campaigns that will give workers the facts they need to make an informed decision on enrolment in supplementary pension plans. the banking system : efficiency, competition, fairness the number of banks operating in the euro area fell by more than 900 between 2001 and 2005. in the euro - area countries, the average share of total assets held by the top five banks rose by 4 percentage points to 43 per cent. in the same period the degree of concentration of the italian banking system diminished slightly. using data referring not to the top five banks but to all the domestic banks in the five largest groups – figures that give a more accurate picture of the italian banking system – the share declined from 46 to 44 per cent between 2001 of 2005 ; it rose to 48 per cent last year. although substantial, the latest consolidation left the overall degree of concentration little changed, owing to the fragmentation that still marks the second tier of banks. italian banks were at the centre of major crossborder transactions. they are stronger today in italy and abroad but there is still room for mergers and acquisitions able to create synergies, with benefits for shareholders and customers. the restructuring has been driven by market forces. the bank of italy does not promote or guide mergers and acquisitions, neither does it impede them ; it does, within the scope of its powers, evaluate the market ’ s choices, with a view to ensuring conditions of stability serving to protect savers and guarantee the orderly functioning of the financial system. it does not create unjustified barriers to entry for new bank operators. the consolidation of the banking industry can and must produce greater efficiency among intermediaries, not less competition ; it must lead to lower prices and better service quality. the groups created by mergers and acquisitions must demonstrate that they are able to reduce the costs for customers significantly and swiftly by accelerating the integration of previously separate organizations. an effective governance structure is one of the necessary conditions for banks to achieve efficiency gains. a rational use of the diversified system of administration and control recently introduced into italian law can contribute to this. in the two - tier system, the supervisory board, clearly separated from the management board, which is