Further, as a means of recognising the processes of financial innovation, consideration should be given to the adoption of a more flexible treatment of the characteristics of the so-called innovative instruments in tier 1, which are basically preferential equity holdings with a step-up in remuneration after 10 years, not currently accepted as tier 1 capital by the Banco de España. This option should, in any event, be accompanied by a decrease in the weight of preferential equity holdings from the present 30% to 15%, in order to heighten the importance of the basic components of tier 1 capital, namely ordinary shares and reserves. Moving on to regulatory developments, 2004 was a particularly eventful and, to tell the truth, difficult and complex year. It saw two projects with a direct impact on credit institutions: the IFRS (International Financial Reporting Standards) and the New Capital Accord, or Basel II. The European Union decided that from January 2005 the consolidated accounts of groups with securities quoted on any regulated market in the EU have to be prepared using international accounting standards (IAS). Its aim in doing this was to assist the growing integration of the European single market by ensuring that investors have access to financial information with the highest possible level of homogeneity. In addition, the international financial system is strengthened, since the plurinational nature of IAS facilitates the convergence of these standards with those of the US.
Caleb M Fundanga: Strengthening and promoting the Zambian private sector Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Celtel Loan Signing Ceremony, Lusaka, 12 December 2006. *  *  *  Managing Director, Celtel Zambia plc Senior Government officials present Chief Executives Officers of commercial banks and other financial institutions present Management and staff of Celtel Zambia plc Members of the Press Distinguished invited guests Ladies and gentlemen It gives me great pleasure to join you today at this celebratory event for the Celtel Zambia plc USD105 million 5-year, two-tranche, local and foreign currency syndicated term loan facility. Undoubtedly this event marks a high-point for all those working at strengthening and promoting the Zambian private sector. In this regard, this event clearly unveils and in so doing reveals the hitherto relatively unknown sophistication and ability of the Zambian private sector and surely the coming of age of our nascent banking and financial services sector. Ladies and gentlemen, it is gratifying to observe that the facility we are celebrating today was initially launched as a USD70 million facility but was subsequently raised to USD105 million following significant oversubscription. It is equally gratifying that of the USD105 million, USD86 million or 82 per cent was raised in Zambian Kwacha primarily from Zambian commercial banks with some participation from international development finance institutions. This is a demonstration of the growing confidence in both Zambian corporate borrowers and business climate by both domestic and international banks.