bilateral activities ( with the central banks of kosovo and serbia ). we are happy to provide our continued support in phase ii. we plan to offer four training events, eight bilateral activities and one internship ; we also expect to cooperate in events organised by other ncbs. the enlargement of the eu is a challenging process. it requires a clear engagement on the part of domestic institutions, including of course central banks, towards building the institutional and technical foundations for monetary policy, the exchange rate regime and financial supervision. our colleagues from the central banks of albania, bosnia - herzegovina, kosovo, montenegro, north macedonia and serbia have left no doubt as to their full commitment. on our part, we at the bank of italy and the whole escb stand ready to play our role. we are confident that the project we are starting today will reinforce our common determination. on behalf of governor visco and the other members of the board of bank of italy as well, i would like to thank all the participants in the project and in this meeting, and the deutsche bundesbank in particular, for all their efforts in the preparation of the project ; and i wish you all every success. designed by the printing and publishing division of the bank of italy

large volumes of banknotes that are returned to the bank of japan every day from financial institutions. careful attention is also paid to the cleanness of each of the banknotes in circulation. the bank also exerts itself to the utmost to improve anti - counterfeiting measures, and has recently been engaged in joint research with overseas central banks on the prevention of banknote counterfeiting using color copiers. through such efforts, the bank aims to preclude the circulation of counterfeits. the bank also provides current accounts at the bank as another means of settlement. the bank offers accounts to private financial institutions, and the funds in these accounts, or deposit money, are equivalent to banknotes in their function as a means of settlement with finality. in order to improve the safety and efficiency of settlements using these boj accounts, the bank has made various efforts, including the introduction of the boj - net the bank of japan financial network system, which is an on - line system for funds transfers among the current accounts held by private financial institutions with the bank of japan. the bank intends to further improve the system in cooperation with those concerned by making realtime gross settlement the only settlement mode, which i shall discuss in detail later. the second function of the bank of japan with regard to the payment and settlement systems is to attend to the safety and efficiency of payments and settlements in japan, and to provide adequate liquidity when necessary. as i mentioned earlier, the important tasks of the bank include ensuring a smooth supply of banknotes throughout the country, and monitoring the stability of daily settlements across the boj accounts. in addition, the bank, in coordination with the operators of the private clearing systems such as the bill and check clearing, plays an important role in preventing any troubles in the systems or participants from jeopardizing the entire payment and settlement systems in japan. in any settlement system, there is the risk that a failure of one bank to meet its obligations will trigger a chain reaction of defaults, eventually paralyzing the entire system. in addition, both payment and settlement systems and individual banks constituting the systems are supported by the market ’ s confidence. as this confidence is in large part a psychological factor, a failure of a single bank could lead to a run on deposits at other banks. such risk is referred to as systemic risk. materialization of systemic risk will disrupt not only settlements between banks but also those between firms and households, having a profound impact on the economy