mr duisenberg gives some views from the european central bank on eu enlargement text of the zolotas lecture given by dr willem f duisenberg, president of the european central bank, held at the bank of greece, athens on 15 october 1999. * * * introduction ladies and gentlemen, let me begin by saying that it is a great honour to be invited here to speak to you on such a prestigious occasion. this is particularly so given governor zolotas ’ – or should i say professor zolotas ’ – stature as perhaps the most significant contributor to greek monetary history over the past few decades. indeed, during professor zolotas ’ time as governor of the bank of greece, a period which, as we are all aware, extended well beyond two decades, the achievements of monetary policy were certainly quite impressive. the greece of the early 1950s was certainly not the same as it is today. at that time the greek economy, suffering from large fiscal deficits and high inflation, was in urgent need of a stable currency. it is thus a great tribute to governor zolotas that, for many years following his arrival at the bank of greece, the monetary stability that had only just been achieved was both maintained and combined with a particularly rapid rate of economic growth. it is therefore not surprising that this period in greece ’ s economic history has so often been referred to as the “ golden era of the drachma ”. of course, times change, and with them the economic and monetary environment. this was certainly the case in the 1970s when, following the collapse of the bretton woods exchange rate system and the explosion of oil prices, monetary authorities around the world were faced with new and difficult challenges. in many countries, attempting to meet these challenges was accompanied by a move to flexible exchange rates. however, for the most part, we europeans attempted and eventually succeeded in treading a different path. this was also the case here, when, in the latter years of governor zolotas ’ time in charge at the bank of greece, exchange rate stability was sought by pegging the drachma to the us dollar. as we all know, at that time greece was not yet a member of the european community. but this was also soon to change. indeed, assisting in the successful preparation for membership of the european community is yet another notable contribution that governor zolotas made to greece ’ s economic history. since that time greece has continued to face challenges as a member of

effect on 1 january 2013. these regulations continue to apply to all banks, with the exception of mutual banks and cooperative banks. additional capital requirements have been imposed on domestic systemically important banks. page 4 of 13 the regulations continue to make provision for separate and additional capital requirements to be imposed on banks based on idiosyncratic risk factors in the form of pillar 2b capital add - ons. the sarb prefers a risk - based approach to supervision and applies the principle of proportionality as an integral part of its regulatory and supervisory frameworks. additional reporting requirements are imposed on banks as and when necessary. the requirements specified in the basel standards remain the minimum regulatory requirements for all south african banks, with the exceptions previously mentioned. expected loss provisioning international financial reporting standard ( ifrs ) 9, „ financial instruments [UNK], became effective for the financial periods beginning on or after 1 january 2018. this international accounting standard will significantly change the manner in which banks determine impairments for non - performing loans – and will therefore affect banks [UNK] profits and capital levels. while the aim of ifrs 9 is to ensure that impairments recognised earlier than under international accounting standard 39, i. e. as soon as a significant increase in credit risk has been identified and after considering forwardlooking macroeconomic information, the changes required to data, processes, and systems are onerous and will require a much greater coordination of efforts between the various functions in banks, e. g. between the risk and finance functions. over the past three years, the sarb has engaged through various means with banks and the auditing profession to monitor the ifrs 9 implementation process by the banking industry. a significant amount of time was spent on debating technical accounting, financial modelling, and disclosure issues. there were and there remain, to some extent, some challenges to overcome. for example, an industry - wide shortage of the necessary skills and resources, particularly suitable quantitative modelling resources, resulted in some banks finding it difficult to meet internal project milestones and targets. consequently, some banks page 5 of 13 had to reduce the duration of their planned parallel runs prior to the implementation date. banks with operations across the african continent were also experiencing challenges with regard to data availability and quality suitability for impairment modelling purposes. furthermore, ifrs 9 does not define what a „ significant increase in credit risk [UNK] is, and it was left to each bank to develop an appropriate methodology that would meet the objective of the standard. the industry, not just locally