Financial Stability Unit
Financial stability at Bank of Zambia shall mean that "the financial system comprising financial intermediaries, markets and market infrastructure is resilient to shocks and is able to smoothly conduct its core tasks of intermediation of financing, transmission of payments, pricing of instruments and redistribution of risks. The Bank designs, uses and communicates macro-prudential policies that minimise the impact of systemic shocks to the financial system. Further, the orderly and efficient resolution of such financial system crises are handled in this context.
GOALS AND OBJECTIVE OF FINANCIAL STABILITY POLICY
- To monitor and analyse vulnerabilities in the financial and real economy which could give rise to a systemic crisis;
- Identify and tackle emerging threats to the financial stability before they materialise into systemic crisis;
- Coordinate policies on financial stability between Bank of Zambia and other regulatory institutions including the Ministry of Finance, Pensions and Insurance Authority and the Securities and Exchange Commission;
- Provide analysis and advise on financial stability issues addressed both domestically and in the international financial markets; and
- Conduct research in order to obtain and analysis information on financial stability issues and risks within domestic regional and international markets.
FUNCTIONS AND RESPONSIBILITIES
Analyse and monitor developments in the macroeconomy to quantify threats to financial stability in effort to prevent and resolve systemic crisis;
- Liaise with external regulators in order to conduct macro-prudential supervision of financial system effectively;
- Provide timely policy advice on financial stability issues to ensure a sound financial system, macroeconomy stability and sustainable economic growth;
- Propose actions to reduce risks to the financial system by formulating and implementing specific measures and policy changes, and strengthening the payment systems and financial regulation framework;
- To improve crisis management arrangements and put in place tools and a framework for speedily resolutions of distressed financial institutions;
- Provide timely information and analysis on domestic and international financial stability to management;
- Monitor and assess risks to the financial system stability and formulate actions to tackle emerging threats before they materialise into systemic crisis;
- Develop and maintain a database of financial soundness indicators and macroeconomic data to facilitate timely financial stability analysis;
- Promote public awareness of issues relating to financial stability and provide information on the conduct of stability policies through the publication of the financial stability reports and other reports;
- Take the overall lead in delivering the Bank responsibilities for oversee the Zambian financial infrastructure;
- Participate in international efforts to address the issue of systemic stability and design appropriate responses to risks; and
- Coordinate the regular meeting of financial stability committee of key stakeholders in the financial sector with a view to sharing information and address issues related to financial stability.