Attitudes to change have varied, partly depending on what role one believes monetary policy played in the crisis. Was inflation targeting one of the perpetrators, contributing to interest rates being too low prior to the crisis; was it the bystander who could only look on in horror, or was it the saviour who ensured that inflation expectations nevertheless remained firmly anchored?6 Personally, I do not believe that the argument that the financial crisis stems from an overly expansionary monetary policy is particularly convincing. As I see it, it was primarily a combination of a lack of supervision and regulation of the financial markets.7 Two obvious lessons are that there was over-confidence in the ability of these markets to regulate themselves and that the distortions in incentives on the financial markets had been underestimated.8 Given the enormous socio-economic costs the financial crisis entailed, there is of course a strong will to correct what one perceived went wrong to ensure it cannot happen again – this applies in particular to the central banks, who had to deal with quite a few of the problems. There is thus an instinct to take on the task of ensuring that financial crises do not arise – not merely through advocating better supervision and regulation of the financial markets, but also through monetary policy. But there are a number of problems with this. Risks linked to household debt have held back monetary policy This leads me on to the situation in Sweden and how monetary policy has been conducted recently.
Caleb M Fundanga: Catering for the un-banked population in Zambia Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of Stanbic Bank Limited’s Mazabuka branch, Mazabuka Town, 10 October 2006. *  *  *  •  The incoming Member of Parliament for Mazabuka, Honourable Gary Nkombo,  •  The Regional Managing Director of Stanbic Africa, Mr. Clive Tasker  •  The Town Clerk, Mr. Chingangu  •  The District Commissioner, Mr. Chinda  •  Traditional leaders here present; Chief Mwanachingwala, Chief Mwenda, Chief Hanjalika, Chief Nalwama, Chief Monze  •  The Chairman of Stanbic Bank (Zambia) and all Board members present  •  The Managing Director of Zambia Sugar Plc, and Managing Director of Stanbic Bank (Zambia) Ltd  •  Stanbic Bank Management and staff present  •  Distinguished invited guests, ladies and gentlemen  It is an honour and privilege to be invited to officiate at this important occasion. Today I join the Bank’s Board Chairman in thanking the people of Mazabuka for the effort and support that has been extended in establishing this Stanbic Branch, which I believe is the first in Southern Province. Distinguished Ladies and gentlemen, I have keenly followed the progress and growth of Stanbic Bank in the last few years and I must say that as Governor of the Central Bank, it has been very gratifying to witness the progressive strategies of a privately owned commercial bank.