the restructuring process. in south africa we are in the fortunate position that our financial system is highly developed and diversified. we have a large number of financial institutions and sophisticated financial markets which perform the function of financial intermediation in an efficient manner. according to assessments made by the international monetary fund and other international organisations the banking regulations of the country and supervision of financial institutions conform to high international best practice. our financial institutions are well managed and non - performing loans are well within the bounds of sound management. moreover, south africa subscribes to the special data dissemination standard of the international monetary fund and meets the specifications for the coverage, periodicity and timeliness of all data categories and for the dissemination of advance release calendars. the timeliness of the accounts of the south african reserve bank and the banking sector is even better than the due dates prescribed by the fund. other african countries have launched a number of initiatives to implement the new international financial architecture. these initiatives are mainly focused on enhancing transparency and accountability, adhering to international standards and codes and maintaining financial stability. a number of african countries have launched medium - term programmes to restructure weak banks. this included measures to address non - performing loans and accumulated losses of banks. in addition, the authorities have increasingly focused on improving banking regulation and supervision, essentially through greater compliance with the basel committee ’ s core principles for effective banking supervision. 5. national payment, clearing and settlement systems the national payment, clearing and settlement systems of central banks in africa have also been influenced to a considerable extent by the changed global economic environment. global trade and financial integration have led to substantial increases in cross - border flows, while financial liberalisation, the creation of new financial instruments and the development of financial markets increased the domestic payments which have to be cleared and settled. the resulting increase in the values and volumes that have to be handled by the payment systems increased non - settlement risk exponentially. developments in information and communication technology have changed the payments structure considerably. although it is still in its infancy on the african continent, the volume of transactions undertaken by means of debit and credit cards have increased significantly and there are signs appearing in south africa that this means of payment may overtake cash payments in the near future. in some african countries mobile banking facilities have come into use. this demands increased security measures and higher standards. south africa has put considerable effort into the revision of national payment, clearing and settlement systems. reforming the national payment system started to receive attention in 1993.

was the only african country that was regarded to have a clear commitment to inflation targeting. south africa shifted away from monetary targeting to informal inflation targeting in the 1990s, and started to apply formal inflation targeting from february 2000. the inflation target is determined by government and at present is specified as an increase measured over twelve months of between 3 and 6 per cent in the overall consumer price index excluding the interest cost on mortgages. the south african reserve bank has complete instrumental independence, but is of course accountable to the citizens of south africa. considerable success has been achieved in bringing the inflation rate down to its present level of 3. 7 per cent as of september 2004. in fact cpix has been inside the target now for more than a year. the instruments of monetary policy in african countries generally agree with those of other emerging - market economies and industrialised countries. in the main they consist of open market operations, treasury bill auctions, transactions in central banks ’ bills, repurchase agreements, foreign exchange market operations and accommodation facilities. most of the african countries continue to make use of statutory reserve requirements. moreover, these reserve requirements are quite high in many of the countries. 4. banking supervision and regulation another important consequence of the globalisation process for central banking has been the rapid pace of consolidation of financial markets and institutions in the world over the past decade. banks have been merged to become bigger players in the market. this consolidation was also extended to include other financial institutions. the consolidation process was not confined to domestic enterprises. many mergers and acquisitions transcended national boundaries to create international players in an endeavour to improve profitability. large international financial conglomerates are now a common feature of the world economy. developments in technology, especially the impressive growth of internet banking, have made it possible for banks to use their online operations to expand into international markets, thereby avoiding the costly process of establishing subsidiaries or branches. in this way they have become players in the retail markets of many countries, without having any physical presence. the development of information and communication technology has made it possible for non - bank institutions to obtain funds from and provide credit to the public. large retailers have become involved in activities closely akin to banking practices. this has blurred the boundaries between a bank and other activities. like most other things on earth, the globalisation and consolidation of banking activities has advantages and disadvantages. on the positive side, these developments could lead to cost saving, improved profitability to the benefit of clients and shareholders, facilitating risk divers