caleb m fundanga : bank of zambia ’ s information dissemination programme speech by dr caleb m fundanga, governor of the bank of zambia, on the launch of the bank of zambia information dissemination programme, lusaka, 28 may 2007. * * * governor, kindly give brief introductory remarks on behalf of the bank of zambia board, management and staff, and indeed on my own behalf, i wish to sincerely thank the zambia national broadcasting corporation ( znbc ) for this opportunity to launch the bank of zambia information dissemination programme. this programme is part of our comprehensive strategy to inform the general public and all our stakeholders on the role of bank of zambia in the economy. what is the primary role of the bank of zambia? just to remind the listeners, the bank of zambia ’ s primary role is to formulate and implement monetary and supervisory policies that will ensure price and financial system stability. our vision, in this regard, is to become a world class central bank. what is your general assessment of the recent performance of the zambian economy? in the past few years, the zambian economy has performed relatively well, recording positive real gross domestic product ( gdp ) growth, with inflation and interest rates coming down. specifically, what have been the developments in output? during the period 2001 - 2005, growth in real gdp averaged 5. 0 % per annum. more recently, in 2006, it is estimated that the economy grew by close to 6 %, marking the eighth consecutive year of positive real growth in output. this positive growth performance has been broad - based, extending beyond the recovery of the mining sector and withstanding adverse shocks, such as droughts and record increases in oil prices. in 2006, real gdp growth was largely driven by the mining, agriculture, construction, transport and tourism sectors. last year, zambia achieved single - digit inflation in 30 years. what were the main contributing factors to this achievement? bringing inflation down to single digits has been government ’ s goal for a long time. it is, therefore, pleasing to note that last year, inflation fell to its lowest level in 30 years. at the end december 2006, the annual rate of inflation had fallen to 8. 2 % from 15. 9 % achieved in 2005 and was well below the target of 10 %. this positive development in inflation was due to continued implementation of prudent monetary and fiscal policies, coupled with increased food supply. this was despite the persistent rise in oil prices on the world market. this year so far,

generally denoting a systemic orientation of ﬁnancial regulation and supervision linked to the macroeconomy. the objective of these earlier macro - prudential policies aimed initially at achieving ﬁnancial stability through smoother economic and ﬁnancial cycles 2. under that premise, several jurisdictions3 started implementing tools like loan - to - value ratios, margin requirements and dynamic provisions. ecb. financial stability review. may 2014 “ the distinction between the micro - and macro - prudential dimensions of financial stability is best drawn in terms of the objective of the tasks and the conception of the mechanisms influencing economic outcomes. it has less to do with the instruments used in the pursuit of those objectives. ” the term " macro - prudential " : origins and evolution - bis quarterly review, part 6, march 2010. notably the usa and europe. macro - prudential regulation : history, theory and policy ( bis. org ) however, it was not until the aftermath of the 2008 global ﬁnancial crisis that international organizations and regulatory bodies began to decisively develop, adopt, and implement macro - prudential policies aimed at mitigating systemic risks that can accumulate over time. this shift was informed by the crisis, which showed that, while traditional micro - prudential approaches are essential, keeping individual ﬁnancial institutions sound is not enough to protect against unchecked system - wide risks and safeguard from systemic crises. therefore, policymakers need a broader approach and a toolkit to safeguard the ﬁnancial system as a whole. the basel iii framework, as introduced by the basel committee on banking supervision ( bcbs ), is a critical step in this direction, providing regulators with tools such as the countercyclical capital [UNK] ( ccyb ) and liquidity coverage ratios that aim to enhance ﬁnancial system resilience during times of stress. the introduction of the ccyb incorporates for the ﬁrst time a macro - prudential tool within the basel standards, aimed at strengthening the resilience and ability of the ﬁnancial system to withstand shocks and to continue providing ﬁnancial services, without amplifying the original shock. in this context, basel iii “ directly addressed ” the risks associated with the “ procyclicality ” of the ﬁnancial system 4. the recent experience with the covid - 19 pandemic, showed that countries where ccyb was activated and accumulated, had some advantages over others where the [UNK] was not