Median responses to the Desk’s July 2017 Survey of Primary Dealers and Survey of Market Participants indicated the estimated cumulative effect on the 10-year Treasury yield to be around 25 basis points over two years following implementation, and the cumulative effect on the 30-year production coupon MBS option-adjusted spread to be 15 basis points over the same timeframe. 13 Results from the New York Fed’s September 2017 Survey of Primary Dealers  and Survey of Market Participants indicate expectations of about a one in four chance of a return to the zero lower bound at some point between now and the end of 2020. Conditional on that scenario occurring, survey respondents on average assigned probabilities of over 80 percent to the portfolio being larger than $ trillion at year-end 2020—an outcome suggesting a renewal of full reinvestments or large-scale asset purchases. Additional reasons for the 10 / 13  BIS central bankers' speeches  muted response in asset prices are examined in a speech cited earlier, “Gradual and Predictable: Reducing the Size of the Federal Reserve’s Balance Sheet.” 14 Projection scenarios considered balance sheet sizes containing long-run levels of reserves of $ billion,  $ billion, and $ trillion, as well as a range of sizes for other Fed liabilities and capital. However, the balance sheet’s normal size is not a fixed value, since some factors, such as Federal Reserve notes (U.S. dollar paper currency) and capital, tend to grow over time.
Accordingly, since 2004, the Government has been implementing the Financial Sector Development Plan (FSDP) with a view to improving the functioning of financial markets and increasing accessibility to financial services. During the initial phase of the FSDP, numerous structural impediments to financial inclusiveness were identified and some measures have been instituted to correct them. The second phase of the FSDP is currently underway and focuses on enhancing the competitiveness of the financial services industry. It also focuses on establishing secondary trading of Government securities in an effort to enhance liquidity and price formation in the debt market. Without the liquidity provided by the secondary market, the primary or new issues market would be seriously hampered in its function of helping productive entities acquire new capital at affordable price. These measures are expected to stimulate development of the capital and money markets necessary for attracting long-term financing in the economy. Ladies and Gentlemen, in order to improve risk assessment of the credit worthiness of Zambian borrowers, the Government also came up with relevant legal provisions for establishing the Credit Reference Bureau (CRB). I am pleased to report that the CRB is now operational and compilation of the database on borrowers has commenced. However, the progress of collating credit information on the state of the clients’ financial status has been rather slow. I wish to take this opportunity to once again appeal to commercial banks and other financial service providers to expedite the process of building the data base on the borrowers’ credit profile.