disruption could be passed on to other ones through their interdependence in financial transactions and settlement. if a computer failure due to a lack of year 2000 readiness materializes in a settlement system, not only financial institutions but also end - users or customers will be affected because they may not be able to withdraw or transfer funds through cash dispenser ( cd ) and automated teller machine ( atm ) networks. the year 2000 problem could seriously affect the business of individual financial institutions as well as the stability of payment and settlement systems. the bank of japan, with the cooperation of market participants, is therefore promoting year 2000 readiness of individual financial institutions and payment and settlement systems. this paper discusses how japan ’ s financial sector is addressing key issues of the year 2000 problem and provides information on its progress in achieving year 2000 readiness. 16 after an overview of the results of the year 2000 problem survey of financial institutions conducted by the bank of japan in june 1998, the paper presents ( 1 ) plans for external tests of payment and settlement systems ; ( 2 ) global initiatives taken by international organizations including the bank for international settlements ( bis ) ; and ( 3 ) an upcoming issue. the paper focuses exclusively on the preparations being made by financial institutions and payment and settlement systems for the year 2000 problem. it does not deal with preparations made by social infrastructures, such as telecommunications or utilities that support computer system operations, nor does it cover year 2000 preparations of companies supplying host computers and software, although these deserve careful attention of financial institutions. * * * this paper was originally published in the form of a brochure on august 14, 1998. for inquiries regarding the brochure, please contact the financial and payment system office ( tel : + 81 - 3 - 3279 - 1111 [ x2954 ], fax : + 81 - 3 - 5255 - 6752 ) or the bank supervision department ( tel : + 81 - 3 - 3279 - 1111 [ x6442 ], fax : + 81 - 3 - 5255 - 6755 ), bank of japan, at 2 - 1 - 1, hongoku - cho, nihonbashi, chuo - ku, tokyo 103 - 8660, japan.

efforts it has been avoided. according to our estimates, in serbia, if we did not react fast and strong, our gdp would have fallen by more than 6 % last year, and the recovery would have taken three to five years, instead of one. the price of non - responding would have been too high, and it would be measured by undermined stability, lost jobs and lost billions of euros of potential gdp. at the beginning i said that serbia entered the crisis in excellent shape : inflation has been under our control for more than seven years, 1 / 3 bis central bankers'speeches we have built a strong fiscal position we resolved the npl legacy – npls are no longer an issue in serbia, we increased our fx reserves as a good buffer against external shocks, we strongly improved our external position. i gave just some results because one of the conclusions by all key players is that the countries that had built good fundamentals before the crisis were in a better position to react strongly and swiftly by large and timely support programmes. the national bank of serbia was the first institution in the country to react at the beginning of the crisis. to stimulate the economy, the nbs reacted timely and forcefully, by using different instruments. we lowered the key policy rate four times - to 1 %, and we kept good access to finance and favourable financing conditions for the government, banks and the private sector. the nbs was the lender of first resort in times when this was needed the most. to provide liquidity we used different monetary operations of different maturities and currencies, to send a clear signal that the central bank will be there to support people and companies, and to calm the market and prevent potential panic. we used repo purchase auctions, bilateral outright purchase of government securities in the secondary market, and we also included corporate bonds in collateral for our monetary operations. the nbs was also among the first regulators to introduce a moratorium for all debtors. also, by several measures we additionally facilitated access to financing for our households, especially to housing financing. when it was needed, the nbs intervened in the fx market and kept relative stability of the dinar exchange rate against the euro, as this is one of the most important pillars of the overall macroeconomic stability in serbia. on top of this, our communication was clear – to shocks of temporary nature we respond by temporary measures. when it comes to the government response, we had three well - calibrated packages. the