changeover with the end of the changeover period on 28 february 2002 the euro became the sole legal tender in all euro area countries with effect from 1 march 2002. both in terms of acceptance by consumers and the achievement of logistical targets, the introduction of the euro banknotes and coins has surpassed all expectations. here and there some minor mishaps have occurred, but this is quite normal for such a huge and complex undertaking. in any case, with the support of european citizens, who have accepted their new money both rapidly and enthusiastically, these minor difficulties have been overcome. european citizens have clearly chosen to be actors and not merely spectators in the euro changeover. according to the latest eurobarometer of the european commission, over 80 % of euro area citizens see the euro changeover as having been successful, and almost 70 % declare themselves happy that the euro has become their new currency. but what were the logistical factors which contributed to the success of the euro cash changeover? first, measures were taken to ensure an early return of national banknotes and coins. one example which i would mention in this context are the campaigns which aimed at encouraging people to pay any surplus banknotes and coins into their bank accounts well before the end of 2001. overall, the number of legacy currency banknotes in circulation fell by almost one - third during the course of 2001. by the end of the cash changeover period, some eur 38 billion – or a little over 10 % of the original amount of legacy currency banknotes – was still in circulation. second, the pre - distribution or " frontloading " of the " critical mass " of euro banknotes and coins made a crucial contribution to ensuring a smooth changeover in all euro area countries. a four - month lead time was required in order to ensure that sufficient euro banknotes and coins were available within banks and other target groups on 1 january 2002. this pre - distribution was a key factor in the successful attainment of one of the primary goals of the changeover process, namely to ensure that the bulk of cash transactions in euro could be effected within a fortnight of the new currency's introduction. all in all, more than 6 billion euro banknotes were distributed by the central banks of the euro area prior to " € - day ". nearly 38 billion euro coins were frontloaded in parallel. to put these figures into perspective, four - fifths of euro banknotes and almost all euro coins were frontloaded during this period. third,

are a drag on banks ’ profits and they keep the banks from lending to the economy. the issue needs to be resolved, but it cannot be resolved overnight. getting rid of npls takes time and effort. in march we published guidance for banks on how to deal with npls, and our supervisors are monitoring closely the strategies banks devise and the progress they make. still, resolving npls as quickly as possible requires the right structures. and here, governments could help by improving the legal and judicial systems. the price of npls depends largely on whether these systems are effective and efficient. the fourth item on my list is risk management. and in a broad sense that also covers internal models. after all, banks use these models to calculate risk weights for their assets, which then serve as the starting point for determining the right amount of capital. i think that risk sensitivity should be central to calculating capital requirements. but i also see that internal models have become very complex. and that makes them prone to error or even manipulation. 1 / 2 bis central bankers'speeches against that backdrop, we have launched a major project ; the targeted review of internal models, or trim, as we call it. with trim, we want to achieve two things. first, we want to harmonise the supervisory treatment of internal models and ensure a level playing field. second, we want to ensure that the results of internal models are conservative and driven by actual risks, and not by modelling choices. this will strengthen trust in the banks ’ calculation of risk and, ultimately, in the adequacy of capital buffers. thank you for your attention. 2 / 2 bis central bankers'speeches