It is critical that banks readily exploit the current relatively favourable conditions to meet capital adequacy objectives and improve their funding profile. Similarly, to promote sustainable growth and to support confidence and competitiveness, governments need to continue their efforts towards restoring sound fiscal positions and improving competitiveness. Many governments have already made significant steps and the efforts must continue unabated. Finally, a fourth concern relates to the risk of persistent market fragmentation. The ECB has used conventional and non-conventional measures to restore the transmission channels of monetary policy and make sure that the impulse stemming from it is transmitted more uniformly across the 17 economies of the euro area. The large size of the Eurosystem’s refinancing operations and the resulting expansion in its balance sheet are a reflection of the impairments which still hamper the proper functioning of capital markets in the euro area. Today, it is of utmost importance to address these impairments, otherwise we will loose the benefits of the freedom of capital movements which was why monetary union was needed in  BIS central bankers’ speeches  7  the first place. There will be no lasting recovery of growth if European households and corporations cannot tap a common pool of savings. To operate smoothly, be more resilient to crises and better support long-term growth, Economic and Monetary Union has to become a true financial union. I will list here some of the key features of the much-needed “Financial Compact”.
It is senior management’s hope that the facilitation that will be given in these workshops will go a long way in addressing the identified teething problems. It is extremely important that you all realize from the very outset that you will be the anchors for the success of this process for your respective departments. For this reason, it is imperative that you understand in full the processes that will be discussed in this workshop. Senior management’s expectation is that you will acquire the necessary tools to enable you facilitate the proper completion of the Context Establishment and Risk Identification exercises within your respective departments. Ladies and Gentlemen: Allow me to give you a brief background on the implementation of the Risk Management Framework at the Bank of Zambia. You will recall that starting in October 2006 through April 2007, the Risk Management Department embarked on a programme of sensitizing all the members of staff and the Board of Directors on the establishment of the risk management framework at the Bank. Given that these workshops had coverage of 99% of all Bank of Zambia staff, I am more than confident that most of you were participants in those workshops. The end of this series of workshops, marked the end of Phase I of the implementation programme of the Risk Management Framework at the Bank. Following the end of the risk sensitization workshops the next stage required the implementation of the framework in the business areas.