1 standard ” - - that is, to hold enough liquid resources in all relevant currencies to make payments on time in the event of the default of the clearing member that would generate the largest payment obligation under a wide range of potential stress scenarios. more complex ccps and those with a systemic presence in multiple jurisdictions are encouraged to meet a “ cover 2 standard. ” the pfmi also provide guidance on the resources that qualify in meeting these requirements : cash held at a central bank or a creditworthy commercial bank, committed lines of credit, committed repurchase agreements, committed fx swap agreements, or highly marketable collateral that can be converted into cash under prearranged and highly reliable funding arrangements. there are two sets of risks involved here. first, where should ccps put their cash? as central clearing has expanded, ccps have had to deal with increasingly large amounts of cash margin. ccps can deposit some of these funds with commercial banks. but regulatory changes have made it more expensive for banks to take large deposits from other financial firms, and in some cases banks may be unwilling to accept more cash from a ccp. and many of the largest banks are also clearing members, which introduces a certain amount of wrong - way risk. a clearing - member default could be especially fraught if the defaulting bank also held large cash balances for the ccp. for this reason, ccps may prudently place limits on the amount deposited at a given institution. in order to diversify their holdings, many also place cash in the repo market. if it is available, the ability to deposit cash at a central bank allows for another safe, flexible, and potentially attractive option - - a subject i will return to later. second, how can ccps be assured that they will be able to convert securities into cash or draw on other resources in times of stress? the pfmi uses the words “ committed ” and “ pre6 arranged ” in describing qualifying liquid resources. indeed, the pfmi does not view spot transactions on the open market as reliable sources of liquidity during times of stress. the federal reserve has strongly supported this approach. liquidity plans should not take for granted that, at a time of stress involving a member default, lines of credit, repurchase agreements, or fx swaps could be arranged on the spot. committed sources of liquidity are more likely to be available. they also allow market participants and regulators to make sure that plans

caleb m fundanga : strengthening and promoting the zambian private sector speech by dr caleb m fundanga, governor of the bank of zambia, at the celtel loan signing ceremony, lusaka, 12 december 2006. * * * managing director, celtel zambia plc senior government officials present chief executives officers of commercial banks and other financial institutions present management and staff of celtel zambia plc members of the press distinguished invited guests ladies and gentlemen it gives me great pleasure to join you today at this celebratory event for the celtel zambia plc usd105 million 5 - year, two - tranche, local and foreign currency syndicated term loan facility. undoubtedly this event marks a high - point for all those working at strengthening and promoting the zambian private sector. in this regard, this event clearly unveils and in so doing reveals the hitherto relatively unknown sophistication and ability of the zambian private sector and surely the coming of age of our nascent banking and financial services sector. ladies and gentlemen, it is gratifying to observe that the facility we are celebrating today was initially launched as a usd70 million facility but was subsequently raised to usd105 million following significant oversubscription. it is equally gratifying that of the usd105 million, usd86 million or 82 per cent was raised in zambian kwacha primarily from zambian commercial banks with some participation from international development finance institutions. this is a demonstration of the growing confidence in both zambian corporate borrowers and business climate by both domestic and international banks. as bank of zambia, we believe that the recent economic developments, such as, the attainment of single digit inflation for the first time in three decades in april 2006 and sustaining low - level inflation for nearly three consecutive quarters so far to november 2006 are supportive of this initiative. these developments also indicate that zambia is able to rally foreign private capital to improve the domestic financing limitations and support efforts of encouraging faster economic growth, private sector investment and exploitation of the country ’ s huge potential in various sectors. ladies and gentlemen, we also believe that events such as this complement the outcomes of government ’ s economic reform agenda which in part is aimed at strengthening our country ’ s creditworthiness as demonstrated by the attainment of the enhanced highly indebted poor countries initiative ( hipc ) completion point in april 2005. ladies and gentlemen, please allow me to elaborate. in order to strengthen and sustain our new status as a credit