all financial institutions. in this context, one important issue that calls for supervisory involvement is the boundary lines between financial institutions ’ cooperation on infrastructure and security, on the one hand, and competition concerning front - line services, on the other. studies have shown that icelandic banks cooperate considerably less on security and infrastructure than, for instance, banks in the nordic countries. in the recent past, the competition authority, the financial supervisory authority, the central bank, and the banks have worked together to develop a shared understanding on these matters, thereby laying a strong foundation for further cooperation. an example of this is the recent establishment of a temporary cooperative forum on operational security of financial infrastructure, including representatives from the banks, the icelandic banks'data centre, the financial supervisory authority, and the central bank. the financial system is more than banks ; it encompasses financial institutions, financial market infrastructure, and financial markets themselves. systemic risk can accumulate in all of these and is sometimes amplified by interactions among them. a detailed discussion of these functions is beyond the scope of our meeting today, but i would like to emphasise that the financial supervisory authority and the central bank monitor risk in all of these areas and review it in depth at meetings of the systemic risk committee and the financial stability council. nevertheless, i cannot leave the topic of the financial system without mentioning the massive overhaul of financial market infrastructure that is currently underway and the germination of ideas in the area of payment intermediation, as the central bank is integrally involved with both. the renewal of the most important core infrastructure elements used for decades to operate the financial system began recently. the investment as a whole represents the financial system ’ s largest it investment ever undertaken. the overhaul will move us away from “ home - grown ” solutions to standardised international systems. the systems being renewed are the banks ’ internal payment systems, the central bank ’ s interbank payment systems, and the nasdaq securities depository ’ s securities settlement system. a variety of benefits accompany new financial market infrastructure, but the implementation process can be risky, partly because the new systems must communicate with the old ones during the transition phase. supervisory bodies monitor this risk. it is analysed at meetings of the systemic risk committee and is identified as a risk factor in statements issued by the financial stability council. such a risk materialised to an extent last november and the cooperative forum on operational security of financial market infrastructure that i just mentioned was set up afterwards. in that forum and elsewhere, work will

pacific region. the cpc shanghai committee, shanghai municipal government, financial regulatory institutions in shanghai, and policy and commercial financial institutions have always supported the pbc in carrying out its work, which guaranteed the effective operation of the institutions of the pbc in shanghai. the newly founded pbc shanghai head office will also need attention and support from all of you. by making continued efforts to improve financial services, the pbc will seek to make new contributions to economic development and financial stability. thank you!