furthermore, we will considerably expand our repo basket by including selected foreign currency securities. this step which is primarily motivated by our intention to transact also with counterparties abroad obviously produces a useful sideeffect on collateral availability over year - end. it is our clear commitment to provide liquidity sufficient to smooth market developments before and at the transition. of course, all banks, especially those which do not engage in repo transactions, can avail themselves of significantly increased lombard limits just for the year - end, if they wish so. as regards the distribution and the available stock of banknotes, we have made the necessary provisions. after having put a new banknote series into circulation recently, our inventories are more abundant than they would have to be even in a worst - case scenario. final remarks let me conclude by making two final remarks. firstly, the need for successful active and reactive communication can hardly be overestimated. the millennium has an almost magical fascination which may stimulate crisis fantasies and is perfectly capable of triggering herd effects. we must counter this by creating credible transparency and reacting to any possible alarming rumours swiftly and in a co - ordinated fashion. this is one of the tasks of the swiss staff 2000 which involves the bankers ’ association, the important providers of services like clearing, settlement and the exchange, banking supervision and the central bank. it seems indispensable that the authorities play an important part both in active and reactive communication. and, secondly, we must diligently carry on our preparatory work, continuously and openly report on the progress made, as well as adjusting the allocation of resources in accordance with the risks involved. at the same time, we must bear in mind that we will be faced with unexpected friction and bottlenecks. while it is true that the millennium transition poses a veritable challenge, i am fully convinced that it is manageable and that we will rise to the occasion. let us all build on the positive relationship between our ongoing efforts to improve our readiness including a whole variety of contingency plans and the chance to eventually enjoy the pleasure of having been wrong and unnecessarily pessimistic in providing for all kinds of gloomy scenarios.

mr gehrig focuses on special structural characteristics involved in solving the year 2000 problem for the financial sector in switzerland speech by prof bruno gehrig, a member of the governing board of the swiss national bank, at the global 2000 coordinating group meeting in montreux on 30 april 1999. i am most delighted to be your luncheon speaker today and thank you for your invitation. i am sure that montreux provides you with a highly stimulating environment for today ’ s global 2000 meeting. as you are no doubt aware, you are leading the way in tackling the year 2000 issue. i would like to thank you for your extremely important and valuable commitment, and i am certain that i also speak on behalf of my colleagues from other central banks, bank supervisors and - even more importantly countless customers in the financial industry. on the threshold of the third millennium we are indeed confronted with most complex and - in many regards - unique challenges. in terms of methodology, i believe it is essential to realise that we are dealing with complex network problems which cannot be solved on the basis of the behaviour patterns of market and competition we are all familiar with. in this context, external or third - party effects are in fact so significant that remarkable collective effort is necessary in order to minimise potential damages resulting from malfunctions. this applies both to the preparatory work and the challenge to overcome frictions which - in spite of our best efforts - will be unavoidable. public institutions and private companies are equally called upon to engage in a high level of cooperation and coordination beyond competition, even if, and especially where no individual business case can be made. the scope of preparations for the year 2000 is unprecedented in many dimensions. i cannot think of any other project which requires a similar degree of cooperation and coordination within and across organisations, industries, sectors and countries. features of the swiss case even though preparations are generally making good progress in switzerland, the country ’ s readiness chart exposes areas in which efforts will have to be strengthened. as far as the financial sector is concerned, which will be the focus of my remarks, there are some special structural characteristics involved in solving the year 2000 problem. our financial centre is the home of some large global players in the banking and insurance sectors as well as the place where numerous cross - border customer relationships are concentrated. we are, therefore, exceptionally vulnerable to international shocks. on the other hand, this also means that we must take on more responsibility with regard to the risk of