is lost, damaged or stolen as the credit card statement can vouch for the fact that you bought the item even in the absence of the original receipt ; • it helps you build a credit line which can be used by the credit reference company to support your creditworthiness when applying for a loan ; and bis central bankers ’ speeches • in the case of emergencies, a card can become handy in paying for requirements which may be completely outside your budget. these are some of the basic conveniences of credit cards which will come about with the extensive use of this instrument in this country. apart from the cardholders, credit cards have other wider advantages which impact on the greater economy. from our perspective as a central bank, we are keen to promote the use of non - cash and more efficient payment systems for its convenience, flexibility and security. we consider it as one of the instruments that can contribute to the promotion of financial inclusion as has been clearly demonstrated in other countries where cards are a common tool for the settlement of financial transactions. in the united states, for instance, 80 % of households have at least one credit card. in zambia, with the growing emphasis on trade within the regional economic groupings like sadc and comesa, plastic money in the form of credit cards, is a very practical way of facilitating settlement of cross border transactions. another benefit which may be associated, with the more extensive use of e - money is the potential increase in tax compliance among the retail and wholesale sectors. the use of credit cards generates accurate records of purchases which currently may not be captured by the zambia revenue authority because business houses may declare false figures. with the use of a credit card there is no provision to cheat the taxman by refraining from issuing a receipt as the record of the transaction will speak for itself. whilst on the subject of greater tax compliance, i would want to see some form of requirement for most businesses to use points of sale terminals and other non - cash forms of payment in our shopping malls and central business district businesses where we see a resistance from businesses to embrace this technology in favour of cash. but let me end my remarks this evening by pointing out a number of problems and challenges that might be associated with the use of credit cards. the biggest disadvantage of credit cards is that they encourage the holders to spend money they don ’ t have. if the credit card does not require that you pay off your balance each month, this balance will accumulate. the longer you wait to settle, the more

evolution in risk management practice across a broad array of financial institutions. through horizontal reviews that focus on specific dimensions of risk management, we have a reasonably good sense of where the frontier in risk management practices is across the industry, and understand where the gap between this frontier and average practice is the greatest. the size of this gap in practice can increase in market conditions where competitive pressures and a search for return works to erode discipline. i thought it might be useful to highlight some of the areas where leading practice is farthest ahead of typical practice. leading practice does not imply that there is a definitely superior model that we expect all firms to converge to over time. in most of these areas, there is some diversity in what defines the frontier of excellence. we recognize this, even as we encourage firms to put in place stronger and more sophisticated systems more commensurate with the complexity of the risks they are taking. • comprehensive aggregation of credit exposure : the most sophisticated among large diversified financial institutions have well - developed systems for aggregating credit exposure, with a common methodology and results available relatively quickly, across the full range of transactions and business lines they engage in with a single entity or groups of entities with correlated risks. • stress testing and scenario analysis : firms at the leading edge have moved well beyond reliance on “ value - at - risk ” complemented by stress tests of discrete shocks. they employ stress tests built around more exacting, forward - looking scenarios integrating large moves in a number of variables, more tailored to the risk profile of the firm and current market conditions, and the reactions of other market participants and counterparties. • counterparty credit risk management : the most sophisticated firms use much more careful and sophisticated approaches for measuring potential future exposure, and they analyze how exposures may respond in conditions of significant market stress. with respect to hedge fund exposure in particular, the leading firms employ comprehensive evaluation of the risk profile of the hedge fund to set credit thresholds and terms and a more disciplined approach to setting sufficiently high levels of initial margin. • measuring and managing interest rate risk : leading institutions assess their exposure to interest rate risk in a comprehensive manner across the firm ’ s business lines. the most advanced approaches are able to assess the impact of rate, spread and implied volatility movements under multiple scenarios in both normal and stressed market conditions. these institutions also strive to achieve a balance between shorter term earnings impacts, and the longer - term preservation of economic value. • liquidity risk : similar evolution has