Tukiya Kankasa-Mabula: Stimulating academic development in Zambia Speech by Dr Tukiya Kankasa-Mabula, Deputy Governor (Administration) of the Bank of Zambia, to the Zambia Centre for Accountancy Studies Students, Lusaka, 17 October 2012. *  *  •  Management Staff  •  Lecturers  •  Students,  •  Distinguished Ladies and Gentlemen  *  Good afternoon to you all, I feel greatly privileged to be here with you this afternoon to share with you the background to my career progression and to also give you an inspirational message that may stimulate you to greater heights. I take this opportunity to thank the management of the Zambia Centre for Accountancy Studies for extending an invitation to me. I always get a satisfying feeling to speak to students, particularly given that I am coming from a background of lecturing. As has been said earlier, I am currently the Deputy Governor Administration at the Central Bank of Zambia. For those of you that may not be too familiar with what the role of the central bank is; the primary role of the Bank of Zambia is, and I quote: “to formulate and implement monetary and supervisory policies that will ensure the maintenance of price and financial system stability so as to promote balanced macroeconomic development”. The functions of the Bank are stipulated in the Bank of Zambia Act and these are as follows: 1.
If a settlement bank encounters difficulties and there are no back-up solutions, there will be a risk of widespread disruption of the payment system. This risk can be reduced through good back-up systems. Second-tier banks have recently improved their back-up solutions. Most banks have an account at Norges Bank. In the course of 2013, all 106 of the second-tier banks with an account at Norges Bank have submitted authorisations permitting the bank to be moved up automatically to first-tier level if the settlement bank should fail, enabling them if necessary to participate in net settlements at Norges Bank directly at short notice. This makes second-tier banks and the settlement system as a whole less dependent on the private settlement banks. The authorisations have strengthened financial stability. Banks participating directly in net settlements are required to have sufficient cover for their clearing positions. Satisfying this requirement is the banks’ own responsibility. They can do this by either depositing funds at Norges Bank or pledging approved securities in favour of Norges Bank. Our analyses show that the great majority of second-tier banks have sufficient liquidity in Norges Bank’s settlement system to be able to participate directly in the net settlements. However, clearing positions can vary widely. Banks participating directly in the settlements over time must maintain sound liquidity management. Conclusion Allow me to conclude by highlighting that new and improved regulation of banks will help to reduce the likelihood of deep financial crises.