the governors of the four non - euro area national central banks. the signature by the latter implies their agreement to the operating procedures. it does not, however, imply their participation in erm ii. further details on the conventions and procedures for erm ii are provided in the separate press release that is being issued to you this evening. the agreement itself will be published in the official journal of the european communities. ( b ) monetary policy issues the governing council agreed on several issues relating to the monetary policy framework in stage three. at the centre of this framework is the report entitled “ the single monetary policy in stage three : general documentation on escb monetary policy instruments and procedures ”, which contains a detailed description of the monetary policy instruments and procedures to be applied by the escb in stage three. the report expands on and updates the material included in an earlier version of the report that was published by the emi in september 1997. i should like to limit my remarks in this regard to the announcement that a copy of this comprehensive report will be released very shortly, at which time a separate press release explaining the nature and purpose of the documentation will be issued. the governing council also agreed upon a guideline for the management of the foreign exchange assets by the national central banks and for the member states ’ transactions with their foreign exchange working balances. these are now being formalised in official legal documentation. ( c ) statistics the governing council endorsed the statistical framework on the basis of a number of reports that had been prepared by the emi - many of which had been published in the past - thereby confirming the ecb ’ s statistical requirements for stage three. i should perhaps point out that the reporting framework for the money and banking statistics of the ecb will appear in the “ general documentation ” that will be released next wednesday. ( d ) euro banknotes with regard to the euro banknotes, the governing council confirmed ( in line with previous recommendations by the emi ) that seven banknote denominations would be issued : 5, 10, 20, 50, 100, 200 and 500. furthermore, it decided that there would not be any national features on the euro banknotes. as you know, the euro banknotes will be put into circulation on 1 january 2002. thus there are fewer than 800 working days to go before their launch. the governing council took note that the technical preparations for the euro banknotes are proceeding according to schedule. the origination phase ( i. e. the process of converting the designs into proof

the achievement of a budget close to balance or even in surplus. in addition to the review of economic developments, a number of organisational issues were settled. ( i ) the general council adopted its rules of procedure, which will be published in the official journal of the european communities. you will recall that i informed you that the governing council ’ s rules of procedure were adopted in july. ( ii ) the general council also decided that the non - euro area national central banks shall pay up 5 % of their subscriptions to the capital of the european central bank ( ecb ). however, the four national central banks concerned will not be asked actually to pay in their share as the amount due is less than they can expect to receive as their share in the proceeds of the liquidation of the european monetary institute ( emi ). further details on the actual amounts involved are provided in the separate handout that will be issued to you this evening. ( iii ) for its part, the governing council completed the list of committees which will assist in the work of the european system of central banks ( escb ). in addition to the eleven escb committees agreed upon at the meeting in july, the governing council decided to establish an international relations committee and a budget committee. the latter was set up in order to provide transparency to the shareholders of the ecb - the national central banks - on matters relating to the budget of the ecb. ( iv ) finally, the governing council endorsed the draft headquarters agreement between the german federal government and the ecb, which will be signed here in frankfurt on 18 september 1998. a number of decisions were also taken with regard to various aspects of the preparatory work for stage three. ( a ) exchange rate policy co - operation between the euro area and other eu countries the general council endorsed the text of an agreement between the ecb and the non - euro area national central banks, laying down the operating procedures for an exchange rate mechanism in stage three ( the so - called erm ii ). you will recall that the european council in amsterdam in june last year agreed to set up an exchange rate mechanism in stage three to replace the present european monetary system ( ems ). for this reason, the emi had, on behalf of the ecb, prepared a draft central bank agreement to replace the current exchange rate mechanism ( erm i, if you like ) by a new one in stage three. it is this agreement which has now been signed by the president of the ecb and