This is why our ongoing  3  See for example Foster, Lucia, John Haltiwanger, and Chad Syverson (2008), “Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?” American Economic Review, 98(1): 394–425. 4  Albertazzi, U. and Marchetti, D. J. (2010), “Credit crunch, flight to quality and evergreening: an analysis of bank-firm relationships after Lehman”, Working paper, Banca d’Italia. 5  OECD Economic Surveys: Greece 2013 (November 2013). BIS central bankers’ speeches  3  comprehensive assessment of banks is so important. It will not only restore confidence in the sector, but also create the conditions for potential growth to recover more quickly. The assessment has a further benefit as well: it ensures the ECB’s low interest rates do not encourage banks and firms to delay restructuring. In this way, it allows us to maintain the monetary policy stance that is appropriate for the euro area, while mitigating any possible negative effects linked to misallocation of resources. The second priority is to encourage alternative funding sources in the euro area and to develop capital market financing, so that long run productivity growth is not so dependent on the health of banks. To some extent this is happening organically: corporates in large countries are already substituting bank lending for security and equity issuance. But this option is largely not available for SMEs, making them very sensitive to banking sector stress. This is why I have been vocal in supporting the revitalisation of the securitisation market in Europe, which has virtually dried up in recent years.
This development demonstrates the bank’s strong and long term commitment to be a significant player and contributor to the development of our financial sector, and the growth of the economy as a whole. The Bank of Zambia wishes to commend the Board of the Bank, Managing Director and his Team for these commendable developments. Ladies and Gentlemen, you will no doubt be aware of the crucial role that banks play in financial intermediation. The real challenge therefore is for all financial sector players to play their honest part in enhancing savings mobilization and to effectively channel the public’s savings to support financing of viable economic activities. as our economy continues to grow and per capita incomes increase, demand for financial services from both the corporate sector and the general public will continue to grow rapidly. Therefore, Zanaco’s wide branch network will strengthen its capacity to meet this growing demand for financial services. Managing Director, Distinguished invited Guests, Ladies and Gentlemen, the Bank of Zambia is always pleased to be invited to occasions such as the one we are witnessing today, because it gives us an opportunity to share with you and the public some of the key developments that are taking place in our financial sector and the economy at large. In this regard allow me to say something about what is currently the most topical issue not only in the financial sector but in the national economy as a whole.