##ss ) which is presently chaired by william mcdonough, president of the federal reserve bank of new york. with the issuance of the us industry advisory in may, the basle committee took up the subject, forming a special task force on year 2000. subsequently, the g - 10 governors issued an advisory on september 8 to all bis member central banks and bank supervisors for distribution to their respective banks world - wide. it clearly spells out the issues pertaining to the challenge, and i strongly recommend you read it if you have not yet had an opportunity to do so. the federal reserve also produced a video entitled “ year 2000 executive management awareness ” and distributed it to all bank supervisors responsible for foreign banks that operate in the united states. in so doing, we encouraged foreign bank supervisors to intensify their efforts to address millennium issues in their home countries and to ensure that their banks were taking the necessary steps to ready their operations, including those conducted in the united states. the federal reserve and the other banking agencies are making their year 2000 supervisory material available to domestic and foreign banks, and the general public over the internet. the federal reserve has already distributed about 20, 000 copies of our video, many in response to requests from abroad, and our web site hot links to that of the bis and many other year 2000 sites world - wide. by widening the availability of information on an international basis, we hope to encourage global readiness. the bis is also working with the international organization of securities commissioners and the international association of insurance supervisors to address this important issue. together, they will convene a meeting in april of international financial supervisors and financial organizations to focus on year 2000 and address issues of concern to all. based on concerns expressed by banks, the work of the bis task force and our own inquiries, we believe that certain countries around the world have not embarked on aggressive compliance supervision and examination programs, so that there is a likelihood that banks in those countries have not yet begun to effectively address the problem and will now find it increasingly difficult to be ready. we are concerned that many us offices of foreign banks may be particularly exposed if their parent is not ready for the year 2000. therefore, we have asked the us branches and agencies to confirm that they will be able to continue to conduct business using the same standards for readiness that we apply to domestic banks. those that rely heavily on their parent for information processing and risk management are expected to be able to demonstrate to examiners that these systems are being read

may 2012. bis central bankers ’ speeches economic situation that is deemed “ unsatisfactory ”. this could result in central banks being perceived as all - powerful, though such expectations are far from realistic. troubled financial markets and dangerous economic circumstances required the implementation of exceptional measures. even if these measures have a welcome impact in the short term, central banks must remain focused on their core mission, which is to ensure price stability. this is their long - run contribution to economic well - being. monetary policy does not create wealth in and of itself. it is the innovative and entrepreneurial strengths of the private sector, not short - term monetary policy measures, that are the engines of real sustainable growth. could the short - term liquidity - creating measures pose a risk for price stability? this risk is often alluded to, and central banks are acutely aware that any measures must be rigorously and repeatedly assessed to prevent any mid - term resurgence of inflation. in any case, there are well - identified means of quickly reversing the effects of an abundance of liquidity, though it is true that the timing of such “ exit ” measures is a matter of delicate monetary policy assessment. today, however, abundant liquidity and extended periods of low interest rates are recognised as posing a risk to financial stability. one of the lessons of the recent crisis is that price stability is not sufficient for financial stability. many central banks are therefore placing greater weight on financial stability concerns in their decision - making processes. to this end, several now envisage the use of specific new ( “ macroprudential ” ) instruments to directly address the risks to financial stability. it is also worth considering whether central banks ’ recent activism could undermine their independence. several critics claim that, by implementing measures such as quantitative and credit easing, central banks have, at times, adopted “ quasi - fiscal ” policies and that the boundaries between fiscal and monetary policy were, thus, blurred. yet, central bank independence is a delicate democratic concept. its objective is to prevent temporal inconsistencies in the policies pursued from leading to results that could harm the economy as a whole. in other words, independence enables central banks to focus on price stability in the long - term interests of a country, as opposed to prioritising the short - term demands of specific political or economic interest groups. at present, the use of unconventional measures is largely motivated by the fact that monetary policy is at the zero lower bound and fiscal policy options are very