institutions in the region, on board in this exercise of preparation for the year 2000 electronic switch - over. the financial systems of the world are today in most countries entirely based on electronic data processing technology, and any major hitch in these systems will obviously have serious implications for financial markets, and therefore for total economic activity. i referred to possible knock - on or chain effects in the global financial system, and the danger of global contagion from one or more infected centre. this danger of contagion is of course, equally important in the case of any domestic financial system. because of the inter - dependence of financial institutions in any closed system, care must be taken that all the financial institutions in each country will be compliant by the end of this year. the programme that must be followed in this process of preparation provides no room for competition amongst individual institutions, but surely requires a high degree of co - operation. this provides a further reason why financial regulators have a major part to play. problems must be overcome, not only by institutions within the financial system, but also by all the major clients of the financial institutions, such as government departments, public authorities, and major non - financial private sector corporations. 4. the responsibility of central banks in the y2k problem central banks hold a pivotal position in domestic and international financial markets. they must obviously take a leading role in preparing their financial systems for this major event. – 3 – the south african reserve bank started at a very early stage in identifying all problem areas in its own information technology and communication systems. in terms of our programme, all electronic technology in use in the bank must be in full compliance by 31 march 1999. some parts of the internal system have already been tested. the crucially important samos system for clearing and settlement transactions is to be tested and must be certified as fully compliant by all participants by mid - april 1999. the bank has also established a financial system risk evaluation committee which is tasked with identifying indirect exposures to the central bank and the financial system, and with developing contingency measures. the committee is, for example, providing for additional stocks of bank notes to be available at all centres for an expected increase in demand around the dates of the switch - over, and is looking at a possible need from banking institutions for additional financial liquidity over this short transition period. the south african government last year also established the national year 2000 decision support centre to co - ordinate and provide advice on a national scale for the

mr stals discusses the importance of the y2k problem and the responsibility of central banks opening remarks by the governor of the south african reserve bank, dr chris stals, at the regional year 2000 meeting of financial regulators from africa organised by the joint year 2000 council and the south african reserve bank in pretoria on 21 / 1 / 99. 1. introduction fairly early in the second millennium, some time in the course of the eleventh century, the renowned persian philosopher and poet omar khayyam, also known as the tentmaker of naishapur, wrote the following verse : “ the bird of time has but a little way to fly - - and lo! the bird is on the wing ” ( from the rubaiyat ) now, nine hundred years later and in the closing months of the same millennium, these words of wisdom become very appropriate once again, referring of course at this juncture to the y2k problem of our modern electronic age. we can with all justification quote khayyam and say : “ the bird of time has but a little way to fly - - and lo! the bird is on the wing ” i believe that this conference will serve to bring this message more clearly to all parties concerned, and particularly to the financial regulators and supervisors of the southern africa region. time to prepare our financial institutions and systems for this major event of the switchover to the new millennium is indeed running out. it is too late now to blame the designers and suppliers of electronic equipment for not having incorporated in the tools we use today four - digit date facilities. this will be tantamount to blaming henry ford for not having provided facilities for a cd player in his model t ford of about a hundred years ago. the distance already covered by our bird of time took us beyond what the experts in this y2k exercise will describe as the sensitisation, awareness, or risk identification phase. those of us who have not gone through these preliminaries may have missed the boat already. looking through the programme for this conference, there is a strong focus on the second and third phases, referred to as actions of remediation and of testing. i hope that most of our participants in this conference find themselves, together with the reserve bank, already well advanced into these secondary stages of preparation for the switch - over date. tomorrow ’ s meetings will proceed into a discussion of the final phases of risk assessment and contingency planning. i believe in this game the best advice for con