, for example, the institutions have, in principle, to decide on their own initiative the basis of the valuation ; despite subjective elements, however, discretionary powers should not unduly restrict the comparability of the results because information on the quality of a loan book can be assessed to some extent independently of the valuation basis selected according to objective criteria. admittedly, there are other ways of assessing risk, as the example of japan has taught us. it is customary internationally and appropriate for different payment arrears in servicing debt to serve as a yardstick. furthermore, the comparable, because appropriate, use of discretionary powers when valuing assets is encouraged by the fact that, in principle, value adjustments on loans may be deducted from taxable profits. the banking supervisors are in favour of this. indeed, they regard it as an incentive to make appropriate risk provision in good time. by contrast, the absence of such an incentive may be a destabilising element in a financial system. japan is a good example of this, too. by the way, including value adjustments in tax assessment is also consistent with the principle of taxing on the basis of performance. having made these remarks of rather a national nature, i shall now return to international transparency. iv the basle committee on banking supervision, which was established by the central bank governors of the g - 10 countries as the committee on banking regulations and supervisory practices as far back as 1975, also issued statements on transparency and accounting as part of its core principles in 1997. the core principles describe the preconditions for an effective banking supervisory system. principle 21 requires, among other things, that “ the bank publishes on a regular basis financial statements that fairly reflect its condition ”. regarding accounts, it is said that “ market participants need access to correct and timely information in order for market forces to work effectively, thereby fostering a stable and efficient financial system. for this reason, banks should be required to disclose to the public information regarding their activities and financial position that is comprehensive and not misleading. this information should be timely and sufficient for market participants to assess the risk inherent in any individual banking organisation. ” the basle committee has since explained and amended its principles in various papers, the most recent being in october 1998. this was a consultation paper on the balance sheet treatment and valuation of credits and on the supply of information about credit risks in lending operations. a constructive relationship with iasc has also been maintained for some time in order

a recognised role beyond europe. also on the international stage, people have confidence in the euro as a currency. and this confidence is crucial. you will recall my earlier comment that the euro speaks a language of both common culture and diversity. you will see evidence of this in the european central bank ’ s euro exhibition, which is also on show here, having just come to the end of a successful showing at the museum fur kommunikation ’ s partner museum in berlin. as you walk through the euro exhibition, you will without doubt recognise the images of bridges, which feature on the back of our euro banknotes. the bridges symbolise communication between the people of europe, and between europe and the rest of the world. they also represent the connection between past and future, and symbolise our european future. if you look at the national sides of the euro coins, you will see evidence of the diversity that i have spoken of, with national icons and symbols representing the national heritage and culture of each member state of the european union. overall, the euro exhibition provides visitors with an opportunity to familiarise themselves with our currency, the euro. various interactive displays enable them to explore subjects ranging from the history of money to the production of euro banknotes. you can also learn how to check the security features of euro banknotes. lastly, as the euro is the currency of euro area citizens of all ages, the euro exhibition also takes the younger generation into consideration. in the kids ’ corner, children can enjoy the educational computer games, learn more about the features of euro banknotes from the interactive displays or follow the story of anna and alex as they catch counterfeiters. for those of you here who have children, this is a good opportunity for them to learn about the euro in an entertaining way. before i conclude, i would like to offer my sincere thanks to ms kugler, mr gold and their teams for their cooperation and for making this evening a success. we at the european central bank fully support activities aimed at educating the public in financial and economic matters, and we are truly grateful for our partners ’ contribution to achieving this goal. many thanks to you all. ladies and gentlemen, distinguished guests, it is a pleasure for me to declare the exhibitions open. thank you.