Unlike in an epidemiological context, however, both behavioural responses have aggravated stresses in the financial system. How so? 14  May (2006), Newman (2002). 15  Epstein et al (2008) provide a range of examples. 16  Wheelis (2006) provides an excellent example of the role of human (in this particular case literal) flight in th transmitting the Plague to Europe in the 14 Century. Transmission of the Plague was reputedly the result of Genoese traders fleeing the Crimean city of Caffa after the Mongol army had catapulted infected corpses over the city walls. BIS Review 53/2009  7  Banks entered the crisis with a large portfolio of risky assets. As risk materialised, banks rationally sought to protect themselves from infection from other banks by hoarding liquidity rather than on-lending it. The result has been enduring stress in money markets. Banks’ mutual interdependence in inter-bank networks meant that individually-rational actions generated a collectively worse funding position for all. That, in turn, contributed to the second behavioural response. Unable easily to fund their asset portfolio, some financial firms instead opted for flight through sales of assets. These acted like the railroad out of Memphis, placing downward pressure on asset prices and thereby spreading the infection to other institutions. Others’ immunity to infection was simultaneously being lowered by widespread marking of assets to market. In escaping the plague, asset flight served to propagate it. These behavioural dynamics – panic hoarding of liabilities, distress sales of assets – have been defining features of this crisis.
Further, I call upon all banks to partner with the Government in alleviating the suffering of our people by contributing to the development of our nation. After all a growing and more developed economy will contribute more to the banking sector and therefore increase more profits. Banks need to seriously engage in activities that will contribute to the environment in which they are benefiting. This can be achieved in many ways including; •  By making available more loans that will increase the productivity of our economy;  •  By encouraging more Zambians to open bank accounts through provision of easily accessible and affordable products and services;  •  By providing products and services that suit the needs of the various customers across the country and not only those that suit people in Lusaka;  •  By opening more branches across the country; and  •  By installing more ATMs  All this, Ladies and Gentlemen, will greatly contribute to the emergence of a middle class in Zambia, which will bring real economic development and lead to poverty reduction. I am pleased to note that despite the recent challenges facing the financial sectors in the world, Standard Chartered Bank’s commitment to growth and re-investment is unwavering. The bank continues to be adequately capitalised with its total assets accounting for 14.4% of the banking sector’s total assets while its deposit base remained strong at 16.3% of the total industry deposits.