As the economic situation abroad normalises, and pressures on the Norwegian krone ease, cost inflation and high activity in Norway will result in higher consumer price inflation. The key policy rate will then gradually be raised and approach a normal level. But developments could take another course. A pronounced weakening of growth prospects or a krone that is too strong may over time lead to inflation that is too low. Such developments would be counteracted by monetary policy measures. We still have room for manoeuvre in interest rate setting – in both directions. More resilient banking sector The financial crisis provided us with some important insights. First, the crisis illustrated that low and stable inflation is not sufficient to secure financial stability. Second, the crisis revealed severe shortcomings in banking regulation. Banking and financial sector regulation is now being reformed in many countries. New liquidity buffer and capital adequacy requirements are due for implementation in line with the changes to the EEA rules. The regulatory reform will make the banking industry more resilient to periods of rising losses and financial market turbulence. Norwegian banks have become more solid in recent years, which is a positive development. Banks’ capital, in particular that of the largest banks, should be increased further in order to satisfy the new requirements due for implementation. Chart 9: Bank lending margins have increased Banks’ lending rates have remained fairly high over the past year, despite a fall in their borrowing costs.
The currency rebasing shall be implemented effective 1 January 2013, and is expected to bring efficiency in the Zambian currency as a medium of exchange and store of value. As you may be aware, the Bank is re-introducing coins which will encourage the use of mechanisms such as pay phones, vending machines, car parking meters and other related technologies. Mr. Chairperson, According to the Finscope Zambia survey conducted in 2009 only 33,7% of Zambian adults have access to financial services, leaving 66,3% financially excluded. This is despite the growth in the number of banks and indeed branches in Zambia. It is obvious that at the current growth rate of the penetration of banking services, if this is left to traditional banks alone, it may mean that the majority of Zambians will be financially excluded for a long time to come. Ladies and Gentlemen, given the above challenge, it is quite appropriate to conclude that the mobile payments industry provides Zambia with a unique opportunity to accelerate the provision of banking services in rural and remote areas at an affordable cost to the Zambian people. To this extent I am happy to inform you that since the enactment of the National Payments Systems Act of 2007, when we only had one designated Payments Business, which was Celpay, the Bank of Zambia has now registered 28 Designated Payments Businesses. The Bank continues to encourage growth of the mobile payments sector and other initiatives that promote financial inclusiveness.