The capital thresholds debate continues.

It seems the circus of the new capital thresholds in Zimbabwe for banks is unrelenting. Dr Gono is at pains to explain his rationale behind the Reserve Bank of Zimbabwe's (RBZ) new rules. What disappoints me is the lack of rigorous debate in Zimbabwe regarding the appropriate levels of minimum capitalization.

Of course the financial indiscipline in the banking industry needs redress but is this approach the right one? Comparing the new thresholds with those of other African countries misses the point altogether. This is because the essential problem which is under the microscope is that of risk. The risks across African countries do vary a lot hence just comparing figures doesn't tell us whether the risks have been mitigated or not.

A proper risk analysis and mitigation strategy is needed, Dr Gono. Not what you presentated last week. Essentially we want to see a framework which links the level of risk mitigated to a minimum capital requirement. But essentially, in Zimbabwe, in an attempt in solving the financial indiscipline in the banking sector, capital thresholds are just one of the tools required.

A lot of things are amiss including poor bank supervision by the RBZ, poor market analysis by banks and an unsustainable transactional costing regime by our banks among other things. Therefore it is important to look at this situation in a proper way to get a clear picture and appropriate solutions.