Although the degree of aggression may have somewhat subsided in the aftermath of this crisis, banks are still extending loans to persons they assess as creditworthy. Outside the banking system, credit availability by non-bank financial institutions has also increased in many forms with annual growth in direct loans disbursed by microfinance institutions and leasing finance institutions showing a significant rise. Chairperson, although these developments are encouraging and commendable, I do not think we should be fully satisfied with them. It is not enough to merely increase the number of financial institutions, nor is it enough to concentrate on building consumer loan portfolios to salaried workers only. In my view, the real gains should arise not only from increased accessibility to financial services by more of our people, but also the cost at which such accessibility is made possible. I am sure you will readily concur with me that access to finance in Zambia is still relatively low at 37.3% as at end July 2009. This is hampered in part by the continued high cost of finance and the limited financing options available to the larger part of the Zambian business sector, particularly the small and medium enterprises (SMEs). One can attribute this state of affairs to several factors which broadly are influenced by the macroeconomic environment as well as micro-structure and practices of our financial system.
Jan F Qvigstad: Seminar on Bayesian Econometrics (ESOBE) – opening remarks Opening remarks by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the fourth annual meeting of the European Seminar on Bayesian Econometrics (ESOBE), Norges Bank, Oslo, 22 August 2013. *  *  *  Good morning everyone! It is a privilege for me to welcome you to this year’s European Seminar on Bayesian Econometrics, which has attracted the interest of such a distinguished group of international scholars. I would like to extend a special welcome to those of you who have traveled far in order to be here today. As a practitioner of economic policy, I have experienced the use of economic models for almost half a century. Back in the late 1970s, the Norwegian Ministry of Finance used a large input-output model to calculate the effects of fiscal policy. Somewhat contrary to common sense – even then – the model suggested that an increase in government spending would reduce inflation. To remedy this obvious mistake, we calibrated a new model – using our priors on critical parameters – to get results that were more consistent with our experience. The lesson I take away from this is the following: To be useful, models need to be consistent with the view of the world that we apply to policy. This consistency principle, in my view, lies at the heart of the progress made possible by Bayesian modeling.