FINANCE MINISTER WARNS DOMESTIC DEBT RESTRUCTURING COULD CAUSE CRISIS IN BANKING SECTOR
By Chamuka Shalubala
Finance and National Planning Minister Dr. Situmbeko Musokotwane has cautioned that restructuring the country’s domestic debt at this time could lead to a crisis in the banking sector.
In an interview with Phoenix News, Dr. Musokotwane explained that applying the same conditions to domestic debt as those used for external debt would cause significant disruption for citizens.
He said most lending to the government, through treasury bills and bonds, comes from banks and that if the domestic debt were restructured, banks’ asset values would decline sharply, triggering potential collapses and leaving depositors unable to access their funds.
Dr. Musokotwane has stressed that this risk is the key reason the government has decided against restructuring domestic debt at least for now.
PHOENIX NEWS
Banks world wide will inevitably collapse. It is the system that is weak. The system of fiat currency has expiry limits. You can not continue to print money endlessly without consequences. In China and other countries in Europe, the use of cash is on the decline. Banks are too expensive to run and can not compete with new more reliable systems like bitcoin which do not require a physical building and employees. It is just a matter of time. Zambia needs to keep up with fresh financial developments instead of criminalising the new systems.