From that, we articulate a strategy of actions by the bank to mitigate the likelihood and the consequence of those risks. The nature and intensity of the supervisory strategy for a firm – and the resources we allocate – are proportional to the scale of the risks to its safety and soundness, and to the threat the firm poses to the wider economy. We then monitor progress against the delivery of the strategy, as well as the underlying risks themselves. This approach relies on judgement – about where the key risks lie, the supervisory strategy required to mitigate those risks, and how to respond to risks crystallising. It is a matter of debate how far and how fast AI will be able to move in the direction of making complex judgements. It seems to me to be highly unlikely in the foreseeable future. Perhaps the main contribution it will make is to improve the efficiency and productiveness of strategy-setting. A typical problem faced by supervisors, for example, is the ‘needle-in-a-haystack’ problem: if something is going wrong in a firm, it can be necessary to find out who in the firm made relevant decisions, based on what information, and why the checks and balances of the firm – the board, and second and third lines of defence – did not work. Advanced analytics can assist. The information to investigate would likely come in many forms – spreadsheets, regulatory returns, management information, e-mails, meeting agendas and minutes.
Fundanga: Islamic banking – building partnerships for development Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, to the Islamic Banking Conference “Building partnerships for development”, Lusaka, 20 October 2008. *  *  *  The Guest Speaker, Mr. Ahmad Zaini Bin Othman Chief Executive Officers of Banks and Non bank financial institutions; Distinguished invited guests; Colleagues; Ladies and gentlemen; On behalf of the Bank of Zambia and indeed on my own behalf, I would like to extend a very warm welcome to you all to this important conference on Islamic Banking. To our Guest Speaker, Mr Ahmed Zaini Othman, I wish to extend a special welcome to you to Zambia and in particular to Lusaka, the capital city. Like the rest of Zambia, Lusaka is a city of tranquility with an easygoing African charm. The city is not short of interesting sites and places to visit. I therefore urge you to find time or indeed stay an extra day or more to sample this special menu that Lusaka offers. I also wish to extend my sincere thanks to Standard Chartered Bank Zambia Plc, the Islamic Council of Zambia and the Eastern Province Chamber of Commerce and Industry for graciously accepting to make presentations at this conference. Ladies and Gentlemen, the Bank of Zambia is honoured and delighted to host the first Islamic Banking Conference in Zambia that begins today, the 20th and ends on 21st October, 2008.