still generally believed that the idea of self - regulation is a useful one, but that it cannot be totally relied upon. many self - regulatory bodies began in an environment where they set the rules which governed them. in time it became clear that this was not enough and oversight bodies were established in most jurisdictions to oversee the implementation of the rules and to provide a forum for appeal to a higher body. regulation however requires a sensitivity to the stage of development of the market and to the norms of market behaviour, and emerging and embryonic markets may require that a balance be struck between the need for markets to achieve rapid development and the need for these markets to remain stable. most developed country markets did not have a highly controlled regulatory environment into which they launched themselves. emerging markets seem to be managing to achieve this balance as evident by the relative stability of markets in latin america and the caribbean. professional bodies have become very important contributors to the stability of the regulatory framework and guidelines issued by many professional bodies have tended to become the accepted norm. indeed the term “ generally accepted ” is a term used to describe gaap guidelines or principles. as the world became more globalised efforts have intensified to make guidelines and principles in each area of discipline internationally acceptable, since companies and institutions were now operating globally. the merging of accounting rules and ias, fasb and gaap into ifrs regulations are an example of this global trend. in this way self - regulatory organizations and professional organizations have had a tremendous impact on the regulatory world in promoting uniformity, reliability and comparability of information across the globe. today regulatory guidelines and guidance notes issued by professional bodies governing operations across the globe on a broad range of topics have been widely encouraged and accepted. however, compliance with guidelines can become an issue in itself – as i am sure this seminar has illustrated as entities and countries are at different stages of development. even the basel guidelines, particularly basel ii guidelines are a case in point. because of the wide differences in levels of development and sophistication, it was necessary to have 3 levels of basel ii, standardized and irb and advanced irb. generally, because compliance is voluntary, what has happened is that reputational risk is increasingly being used as an enforcement tool and has become very important, since a statement by an international organisation that an entity or even a country is not compliant is itself a damaging statement. this was taken to inordinate lengths at the time of the oecd saga in 1999 in respect of offshore

the back of progress in financial liberalization and globalization as well as the increasing issuance of jgbs, it was difficult to manually process the large number of payment and settlement transactions. it was against this background that financial institutions implemented the online processing of settlement and dematerialization of securities certificates. as a result, the efficiency of payment and settlement systems significantly improved. the periods coincided with those in which major payment and settlement systems initiated their operations, including the zengin data telecommunication system ( zengin system ) in 1973, the bank of japan financial network system ( boj - net ) in 1988, and the japan securities depository center ’ s system in 1991. bis central bankers ’ speeches during and after the 1990s, payment and settlement systems put priority on strengthening their safety by making use of the existing financial institutions ’ computer systems and market infrastructures. from the 1990s to the beginning of the 2000s, efforts to reduce the settlement risks made significant progress against the backdrop of the asian currency crisis and japan ’ s financial crisis. the boj - net introduced delivery - versus - payment ( dvp ) for jgbs in 1994 and real - time gross settlement ( rtgs ) in 2001. in 2002, major central banks jointly supported the launch of the payments of two different currencies on a paymentversus - payment ( pvp ) basis by continuous linked settlement ( cls ). by the middle of the 2000s, all other central counterparties ( ccps ), including the current japan securities clearing corporation ( jscc ), were established. after the global financial crisis in 2008, further initiatives were taken in order to enhance the safety of payment and settlement systems. these include the introduction of international regulations, such as the obligation to use the ccps for standardized over - the - counter ( otc ) derivatives and the publication of the principles for financial market infrastructures ( pfmis ) jointly by the committee on payment and settlement systems ( cpss ) of the bank for international settlements and the international organization of securities commissions ( iosco ) in 2012. 1 the pfmis were introduced with the intent to reinforce the global standards set during the first half of the 2000s. the question now is : what does the future of payment and settlement systems look like? looking at the environment surrounding the current situation in japan, economic activity continues to be globalized at a faster pace. for example, japanese firms and financial institutions are increasingly deploying their operations in asia, and businesses and households