conducted in 2015, national treasury, the financial services board and the sarb will soon embark on a more comprehensive review of conduct in the wholesale money, debt capital, foreign exchange, commodities and derivatives markets in south africa in order to strengthen market conduct. the exercise is expected to be similar to the fair and effective markets review conducted in the uk. the review, which is scheduled to commence next month ( with further details to be announced in due course ), will look at the standards and practices in south africa ’ s wholesale financial markets, both regulated and unregulated, in terms of governance, accountability and incentives ; it will ultimately develop recommendations for overall conduct standards to enhance the integrity of our financial markets. page 7 of 9 the bank for international settlements is in the process of developing a global code of conduct for foreign exchange markets which will set out the principles of good practice in the foreign exchange market. the code will be released on 25 may 2017. the sarb participated in its development and is now in the process of consulting with a wide range of market participants via the foreign exchange subcommittee of the financial markets liaison group with the view that south africa should be an early adopter of the code within any proposed time frames. conclusion let me conclude by once again expressing, on behalf of the financial markets department and the entire sarb, our appreciation to all the market participants for their cooperation and support over the years. we look forward to continuing our interactions in the future. i would like to thank our financial markets team for the sterling work over the past year, for their dedication and commitment to the task. allow me to also draw to your attention some changes that have taken place in the senior management of the financial markets department. in preparation for the upcoming retirement of mr callie hugo in 2018, with effect from 01 april 2017 callie assumed the role of special projects manager in the office of the head of department. mr zafar parker, who previously headed up our reserves management team, has taken over from him as head : market intelligence and operations this week. while callie still has his work cut out for 15 months or so, it is only proper that we already thank him today for his tremendous contribution in guiding our money market operations over many, many years. thank you also to our staff at the conference centre for organising this event. page 8 of 9 as in previous years, a newsletter called fmd update has been prepared for the occasion, which provides information on some of the key strategic initiatives that the financial

$ 100 000 each would be created and sold to a cash - flush investor such as a pension fund for us $ 500 million. this is nothing new – mortgage advances have been securitised on a substantial scale for many decades. incidentally, the borrower would usually not even know that his or her mortgage loan had been securitised – the borrowers continue to send their instalments to the institution or “ mortgage originator ” which initially extended the loan. but the mortgage originator now simply passes on the instalments received to a company created to handle the pool of securitised mortgages, a “ special purpose vehicle ”, from where it is redistributed to the ultimate owner of the securitised mortgages – the pension fund in this example. numerous “ structured financial products ” were developed around the securitised mortgages. for instance, a batch of risky or sub - prime mortgage advances could be lumped together and sold off as a separate “ tranche ” which would pay a higher rate of interest than a batch of standard mortgages. furthermore, some institutions provided guarantees or partial guarantees to enhance the risk - return characteristics of some of these products. and all remained well as long as the property boom continued. loans could be extended quickly and repackaged and securitised speedily. the us housing market eventually ran out of steam around 2006 as supply started to outstrip demand, reinforced by tighter interest rates. this set in motion a chain of events in which subprime borrowers increasingly fell behind on their commitments and certain types of securitised assets and structured products started to show their true colour. as these assets stopped performing ( or, at best, paid significantly less than previously projected ) investor appetite for structured products and securitised assets diminished rapidly. this interrupted the process in which original lenders ( mortgage originators ) could so comfortably extend a loan and sell it off to somebody else to carry the credit risk. liquidity in that market evaporated rather quickly, its previously smooth - running machinery grinding to a halt. more fundamentally, investors and borrowers as well as all those institutions in between discovered that the risk premia which they had priced into a range of financial assets were grossly inadequate. this inadequacy extended beyond sub - prime mortgages, and beyond the usa only : numerous types of securities and derivatives were involved. during the credit boom, investors had struggled to understand