1980. the werner report proposed the inception of an independent institution for fiscal monitoring and coordination. this idea clearly reflected that a single monetary policy would need support from sound public finances. more concretely, the werner report called for closer economic policy coordination with an agreed framework for national budgetary policies. at the institutional level, it suggested a “ centre of decision for economic policy ”. this coordination body for economic policies should have been established alongside the european system of central banks, i. e. the monetary authority. both institutions were to be independent from the national governments, being politically accountable only to a european parliament. this independent economic authority should have influenced the national budgets with a focus on the level and the direction of the balances as well as the financing of deficits and the use of surpluses, respectively. in the next major attempt to design a single european currency, the delors report in 1989, the insight that sound fiscal policies would be necessary to safeguard the credibility of the common money was still vivid. that blueprint named after the president of the european commission at that time, jacques delors, stated that “ an economic and monetary union could only operate on the basis of mutually consistent and sound behaviour by governments and other economic agents in all member countries. ( … ) uncoordinated and divergent national budgetary policies would undermine monetary stability and generate imbalances in the real and financial sectors of the community. ” almost exactly 20 years ago, the maastricht treaty was drafted by the european council on 9 / 10 december 1991 in the dutch city of maastricht. it founded the european union and led to the creation of the single european currency and to provide a framework of lose policy coordination. bis central bankers ’ speeches at the very core of that framework the no - bail - out clause and the stability and growth pact ( sgp ) were installed. the first should have excluded free rider incentives and the second should have aligned national fiscal policies to prevent negative spill over effects to the currency union as a whole. the sgp was a compromise of quantifying fiscal soundness without interfering with the budgetary and fiscal policies of sovereign states. it aimed to maintain fiscal discipline within emu. member states adopting the euro had to meet the maastricht convergence criteria, and the sgp should make sure that they continue to observe them. the compromise was also characterized by the strong belief that governments would be reactive to market discipline. however there was a lack of political will to

always agree with the reserve bank ’ s hard line approach on financial disciplines, but who always remain loyal to their central bank. it did not go unnoticed in the world financial markets over this past year, with major global financial market disruption, that the south african banking sector remained stable and sound. i give the credit for this to you, the managers of sound and well - disciplined private sector institutions. finally, talking about the people of central banking, i must thank my wife, my four children together with their spouses for their support over many years. i like to refer to the husband and wives of my children as my children who became my children because of the decisions of my children. my wife seldom had a normal husband, my children must on many an occasion have missed a normal father in the house because they had to contend with a husband and a father addicted to central banking. my peers as central bank governors will know what these words mean. 4. the future of central banking looking ahead, i can only express my regrets that i were not as of today ten years younger. exciting times lie ahead for the central bankers of the world as the process of the integration of financial markets around the globe will continue. however, i leave the south african reserve bank in great peace of mind because i am confident that mr tito mboweni and the team with him in the bank have the ability, the determination and the will to steer south africa successfully into this brave new world. tito, i admire the way in which you approached the past year of induction with us in the reserve bank. you succeeded in getting the staff of the bank on your side. you grasped very quickly what many outsiders will always regard as the mystique of central banking. you have truly become one of the members of the exclusive club of central bankers of the world. i leave the bank with great confidence that you will be the governor that will finally destroy the african jackal of inflation in our country. i wish you well. 5. conclusion one day, shortly after lunch, as i was sitting in the governor ’ s office on the 32nd floor of the reserve bank head quarters building in pretoria, the sliding door to the balcony in front of the office was standing open. i heard a noise and there came a bird almost falling out of the air as if it was shot. i walked out and found a beautiful homing pigeon lying on the floor of the balcony as if it was dead. i carried on with my duties behind my