called “ foreign ” fees – are not always properly disclosed ( and in many cases are higher than necessary ) ; the earnings stream for owners of independent atms – about half the atms in australia – are limited to the interchange fees paid by banks, which are of course their competitors ; and access by new entrants is difficult, potentially limiting competition. under the new arrangements, there will be no interchange fees. an atm owner will be able to charge the customer directly a fee for the use of the machine, but must disclose the fee prior to the transaction. banks will probably continue to allow fee - free withdrawals by their customers at their own machines, because they expect to cover those costs with the revenue earned across the entire customer relationship. use of another bank ’ s atms will presumably attract a fee by that other bank to cover the costs. but the only cost to a cardholder ’ s bank associated with use of a “ foreign ” atm is the cost of processing the transaction electronically – a matter of no more than 10 cents. given this, we cannot see any strong case for a “ foreign ” fee. independent atm owners will charge for the use of their machines, but that will maintain an incentive to grow their network. otherwise, it is likely that the independents as a source of competition would diminish over time, reducing consumer choice. access to the system will be governed by a code, which caps the price of connections, so that new competitors cannot be unduly hampered by the incumbent players over - charging to connect. the essence of the changes is simple. people have always been paying, one way or another, to use atms. atms do have a cost of operation and somehow that cost has to be covered. even where no explicit charge is levied, somewhere or other the financial institution is making up that cost. they do not provide services for free. now people will know exactly what the price of an atm transaction is, and they will know it before completing the transaction. there should be no “ foreign ” fees of any significance. and competition will be maintained, by allowing the independent atm owners to remain viable and new competitors to enter more easily. that is, in our judgment, an improvement over the arrangements of the past and is the best way of keeping costs down in the long run. my colleagues and i now look forward to your questions.

summary of an article entitled risk disclosure by financial institutions published in the bank of japan quarterly bulletin of february 1997 bank of japan, communication, 28 / 2 / 97. introduction public disclosure by financial institutions has long provided information about business performance through the publication of financial statements. in recent years, however, a number of financial institutions have come to focus on disclosure of a wider range of information, including their management policies. this is partly attributable to the expansion of derivatives transactions, which has made risk management techniques increasingly important in the management of financial institutions, and which has thereby encouraged financial institutions to improve such techniques. accordingly, individual financial institutions have been motivated to reveal voluntarily their risk exposures and risk management methods in order to win a favorable assessment from market participants. disclosure thus brings into play a check mechanism inherent in financial markets ( hereafter referred to as the market check mechanism ) that disciplines management of financial institutions, and thereby helps to enhance the efficiency and transparency of the markets and to stabilize the financial system. this report examines the disclosure of information on risks of financial institutions, with an overview of the current practices and future issues. it is intended to serve market participants, the beneficiaries of the information disclosed.