its buildings. this project should result in a reduction in the consumption of electricity and fuel. planning is in progress for several projects at the various branches around the country to ensure the efficient distribution of currency. the design for the proposed new bloemfontein branch has commenced, and tenders are awaited for extensive additions and alterations to the east london branch. the new cafeteria at the pretoria north branch has been completed. furthermore, the cape town tower block will be upgraded and the johannesburg branch will undergo major repairs. at head office large projects aimed at enhancing the existing infrastructure have been completed. these include the replacement of carpets, modernisation of lifts and maintenance of the air - conditioning system. the upgrading of the fire protection and evacuation systems, and the project to improve accessibility for people with disabilities are under way. conclusion global and domestic developments are expected to continue to pose a challenge to monetary policy in the coming year. in the international markets heightened volatility is expected to persist and growth in industrialised countries is expected to moderate further. the outlook for commodity prices is therefore uncertain and this makes for a difficult monetary policy environment. the bank will continue to focus on bringing inflation down to within the inflation target range. the objective of the bank remains to achieve and maintain low inflation in the interest of sustainable economic growth. during times of global financial market instability it is even more important to maintain vigilance over the payment system, domestic financial markets and the banking system in particular. after the successful implementation of basel ii, the bank will continue to monitor closely the domestic banks not only with respect to the possible impact of global developments, but also to the impact of tighter credit conditions on indebted households and firms. staff development will remain one of our strategic objectives. there will be a continued focus on training and development within the context of our employment equity plan. appropriate training is a benefit not only to the individual, but more generally to the bank and the wider economy. acknowledgements i wish to thank the presidency, the government and parliament for their continued support. the bank maintained a good working relationship with the national treasury through the system of bilateral committees. furthermore, i wish to thank the minister and deputy minister of finance, and the director - general of the national treasury and his staff for their ongoing support and co - operation. sincere thanks are also due to the members of the board of the bank for their tireless efforts in ensuring appropriate corporate governance in the bank. i welcome mr elias masilela who has

carry out around 1. 6 billion transactions. however, the development of payment instruments and services are not “ just ” technical developments ; they also pose some real challenges to us economists. for central banks, it is important that our payment system policies are founded on sound economic theory and research. an event such as this conference is thus important for norges bank and other central banks that wish to promote the use of efficient payment services. as mentioned, safe payment systems should continue to serve the markets even in periods of market turbulence. in my opinion, most large - value payment systems have operated very reliably in the ongoing financial situation. safe and efficient clearing and settlement have been in demand as banks ’ trust in each other has weakened. in norway, our systems have had to handle major problems in two icelandic banks operating in our country. these problems have been handled smoothly. times of crisis can also be a turning point, providing the opportunity for change. during the norwegian banking crisis in the late 1980s and early 1990s, norges bank and other public authorities put pressure on banks to increase their income from bank charges, including payment services. i believe that as banks have to focus even more on running a costefficient business, the incentives for developing the payment system further will be strong in times to come. for this conference we have received a large number of high - quality papers. i know that the selected conference speakers represent some of the best researchers in this field. we are especially pleased to have as keynote speakers two of the leading scholars in the economics of payments systems : david humphrey from florida state university and jean - charles rochet from toulouse school of economics. let me also extend my thanks to the three other members of the programme committee : gabriela guibourg from sveriges riksbank, eirik gaard kristiansen from the norwegian school of economics and business administration, and bent vale from norges bank. as i mentioned earlier, i visit nice in the south of france quite often. and from my direct observations, i notice that france has developed very fancy methods of processing cheques. however, when i go shopping in nice, i can ’ t help noticing that writing these cheques still creates rather long queues at the checkouts. hopefully the knowledge we gain from the research you produce will improve efficiency in the payments systems – and shorten checkout queues! i hope you will all enjoy the conference. i now give the floor to bent vale, who will chair