Yes, we could add page after page to the rulebook, setting out detailed rules, definitions and thresholds governing how banks should deal with risks and specifying, for instance, which tools supervisors should use in certain situations, and when. But with each new page, more loopholes open up. It becomes easier for 2/4  BIS central bankers' speeches  banks to game the system. This defeats the purpose of a rulebook and poses a threat to stability. Second, there is the problem of interaction. The more rules there are, the more they can interact and interfere with each other. If there are two rules, there is just one way in which they can interact. If there are 1,000 rules, they can, in theory, interact in at least 500,000 ways. It becomes ever more difficult to foresee the overall effect of the rules, and the danger of unintended sideeffects increases. And third, there is the issue of costs. The thicker the rulebook, the more expensive it becomes for banks to comply with it and for supervisors to do their jobs. These costs are justifiable if each additional rule reduces the risk of another crisis. However, at a certain point the costs of the rules begin to outweigh the benefits. So, instead of having overly detailed rules, we should have a strong basic set of rules that allows supervisors some discretion. .Supervisors have the relevant skills and experience, and in-depth knowledge of the banks they supervise. We should ensure that supervisors can continue to apply their judgement.
Ladies and Gentlemen, as we move ahead and look to the next 40 years of central banking in Zambia, the Bank of Zambia will continue to play a catalytic role in facilitating the exchange of ideas among the banking community, the private sector, and all other key stakeholders through such gatherings as this conference. We will continue to carry out our mandate, with the objective of facilitating the work of Government and economic activities of the private sector for the betterment of all Zambians. Mr President, Madam Chairperson, Ladies and Gentlemen, I would be failing this occasion if I do not recognise that the achievements of the Bank of Zambia over the last 40 years are a result of the hard work by employees, past and present, including the former Governors. Allow me at this point to present the names of the former Governors and also to recognize those that are in our midst. BIS Review 48/2004  3  These are: •  Mr R C H Hallet, 1964-1967;  •  Dr Justin Zulu, 1967-1970;  •  Mr Valentine S Musakanya, 1970-1972;  •  Mr Bitwell R Kuwani 1972-1976 & also 1981-1984;  •  Mr Luke Mwananshiku, 1976-1981;  •  Mr David A R Phiri, 1984-1986;  •  Mr Leonard Chivuno, 1986-1987;  •  Mr Francis X Nkhoma, 1987-1989;  •  Mr Jacques A Bussieres, 1990-1992;  •  Mr Dominic C Mulaisho, 1992-1995; and  •  Dr Jacob Mwanza 1995-2002.