The volume and value of cheques returned unpaid on account of insufficiently funded accounts continued to decrease following the issuance of the directives on dishonoured cheques and direct debit instructions which were issued by the Bank of Zambia in the second quarter of 2010. The volume of unpaid cheques decreased by 15% to 4,202 (Quarter 2: 4,929). Similarly the value of unpaid cheques decreased by 6.6% to K35.3 billion from K37.8 billion reported in the second quarter of 2010. The public is advised to ensure that they have sufficient funds in their accounts whenever they issue cheques in order to avoid charges. Economic reform programme An IMF Mission was in Zambia from 2nd to 15th September 2010, to conduct the 5th Review under the Extended Credit Facility (ECF) arrangement. Overall, the mission was satisfied with the programme performance. A follow-up mission visited the country from 28th October to 3rd November 2010 to conclude the discussions. The mission had fruitful discussions with the Zambian authorities and reached agreement on a set of macroeconomic policies and structural measures for the remainder of 2010 and for 2011. The policies and structural measures would pave the way for the completion of the Fifth Review of the ECF arrangement, subject to approval by the IMF’s Executive Board. The Board meeting is expected to be held around mid-December 2010. BIS Review 148/2010  11  The IMF mission commended the Zambian Government for its handling of economic policy so far in 2010.
These rules emphasise sensible governance structures – such as preventing control function officers from having their bonuses determined by the profits of business units they oversee. They also require risk-adjustments in quantifying bonuses – for instance, two traders who bring in the same profits, but expose the firm to different levels of risk, are rewarded differently. The other area that is important to fostering a healthy culture at the situation-level is “speaking up”. It is important that there are clear and robust whistleblowing arrangements for employees to raise legitimate concerns about illegal or unethical practices. In addition to the statutory protection offered for whistleblowing to authorities, it is also important that financial firms have internal arrangements for concerns to be raised within the organisation. However, whistleblowing only makes up a small portion of a speaking up culture. In fact, it is a last resort which will not need to be used in an organisation with a healthy culture of open discussion. For professionalism and integrity to prevail – it is crucial that financial firms encourage constructive challenge and healthy debate. This is particularly pertinent for the more ambiguous issues of ethics, professionalism and integrity. (c) Person We have discussed the elements of “system” and “situation”. The third element that is critical for a healthy culture is that of the “people”. I pointed out earlier that the evidence of psychology suggests that the “system” and “situation” are far more likely to predict actual ethical behaviour compared to personal convictions.