was the same for all former yugoslav republics. in fact, the activities of the head office of the republic of macedonia were reduced to performing only routine operations of executive and operational character. all policies, decisions and regulations were created and adopted in belgrade. the second period, period of institutionalization, represents some kind of a turning point in central banking. in 1971, instead of head offices of the former yugoslav republics, national banks of the republics and provinces were established, including the national bank of the republic of macedonia. in 1972, the parliament of the republic of macedonia adopted for the first time a law on the national bank of macedonia on the level of the republic, while in 1974 it was defined also with the constitution of the republic of macedonia. the first governor, appointed in 1972, was stojan kjosev, who was until then a member of the executive council of the republic of macedonia. in the law, the national bank of macedonia was defined as an institution of the single monetary system of former yugoslavia, with a status of a legal entity. established as such, it was independently executing the projections of the credit policy for the republic of macedonia. however, the setting of the monetary, credit and foreign exchange policies was still within the competence of the national bank of former yugoslavia, but a growing number of the decisions of its bodies were adopted by a consensus of the representatives of the republics and provinces. five years later, in 1977, the national bank of macedonia earned new competences : bank licensing, conducting international payment and credit operations. it was also given more rights and responsibilities with respect to maintaining banks'liquidity. these functions and competences remained almost the same in the following 15 years. the third period, period of complete monetary independence, followed by the constitution of the independent state - republic of macedonia, is definitely the most important period in the central banking from all aspects. this is a period of sweeping transformations, which constitute the nbrm as an institution with all explicit attributes of an independent central bank, hence as one of the key attributes of the statehood of the republic of macedonia. in this period the following had to be done : • introduce the new macedonian national currency - denar ; • surmount inflation, which at the time of the monetary independence equaled around 1. 200 percent on annual level ; • overcome the accumulated problems in banking, managed primarily by debtors ; • repay the so - called " frozen " foreign currency deposits to the depositors, as the first pre

liberalization of the capital account, justifiably anticipated larger inflows of capital, which create new environment for our economy, together with the risks from instability and speculative pressures. this is imposed also by our strategic determination for admission of the republic of macedonia to the eu - which ultimately means reaching an institutional capacity adequate to the criteria of the maastricht agreement from 1992 in order to be prepared to join the european system of central banks. we should even further increase the capacity of supervision. therefore, new regulations, which we develop together with the ministry of finance are already underway, as well as new intensive activities for gradual shift towards risk - based supervision, as a basis for implementation of the new capital accord - basel 2. at the same time, we should improve our capacity for analyzing the financial stability of the country - activities we have started, but which require great efforts and dedication. i would like to express my gratitude on behalf of the national bank to all of you who in various circumstances and under serious challenges contributed to the development of an institution such as the national bank of the republic of macedonia. the monograph we prepared on this occasion - 60 years of central banking in the republic of macedonia, is primarily a tribute to them. i would like to thank all of you who are here tonight, deeply feeling the historical significance of this jubilee!