and the euro ( fig. 3 * ). with that and the principles just mentioned in mind, the government and the bank of latvia have worked together to develop a three - stage strategy for the introduction of the euro ( fig. 4. * ) : at the beginning of 2005, the lats is pegged to the euro. latvia will strive to join the exchange rate mechanism ( erm ) ii soon thereafter. • in 2007 - spring, at the earliest - the eu institutions give their evaluation of latvia ’ s readiness to join the euro area • after receiving a positive evaluation, latvia would expect to receive an invitation to join the emu. then, at the beginning of 2008, the introduction of the euro will begin. let us explore each stage in more detail. first - about the first stage that is only a couple of months away. that is - about the change of the lats ’ peg and the chosen exchange rate level between the lats and the euro. we have considered all arguments and summed up all the pluses and minuses. as most of you may know, the bank of latvia has made a decision to peg the lats to the euro on january 1 of 2005 in accordance with the market rate. this market rate would be registered on the last business day, december 30, 2004. by pegging the lats to the euro, the bank of latvia will neither increase nor decrease the value of the lats : it will neither be devalued, nor re - valued. use of sdr formula in setting lats exchange rates to better understand the basis for our decision, it might be helpful to remind ourselves of the mechanism whereby the exchange rate between the lats and the euro is set at present. as you know, the lats is pegged to the sdr basket of currencies, the imf unit of settlement - the bank of latvia ’ s official exchange rate between the lats and the sdr is 0. 7997 : 1. it has remained unchanged since the beginning of the peg in february 1994. taking into account the exchange rates between the currencies in the sdr basket and the fixed exchange ratio between the lats and the sdr basket, the official lats ’ rate against the other currencies, including the euro, is also determined every business day. since the mutual exchange rates of the principal world currencies, which are all part of the sdr basket - the us dollar,

another, more recent research ( liendrop at al., 2011 ) suggests that the overall level of transparency of supervisors in industrial countries is very similar to transparency of supervisors in emerging economies indicating to positive movements in emerging markets in the area in recent years. indeed, supervisors seem to endorse transparency. in 2006 the basel committee on banking supervision, in the basel core principles for effective banking supervision, first mentioned that supervisors should follow transparent processes. this means that supervisors should disclose their objectives and bis central bankers ’ speeches framework and be held accountable for performing their duties in line with those objectives and framework. the capital requirements directive iv ( crd iv ) stipulates that supervisors need to publish relevant information on the laws, regulations, administrative rules and guidance, information on options and discretions, the general criteria and methodologies used in the supervisory review and evaluation process, and aggregate statistical data on the implementation of the prudential framework, including the number and nature of supervisory measures taken and administrative penalties imposed. the european banking authority ( eba ) acknowledges the need for supervisory transparency and has set up guidelines for supervisory transparency ( cebs, 2010 ) intended to increase the transparency of supervisory practices and to enhance the comparability of national practices. furthermore, eba publishes relevant information of all eu countries on supervisory laws and regulations and statistical data on national banking sectors, risk indicators and supervisory actions. while the benefits of greater transparency in supervision are broadly recognized, the level of disclosure remains a challenging issue. this relates to the specifics of the supervision as it obtains sensitive information with respect to the state of individual banks that if publicly disclosed may affect its competitive position. given this, what one could expect is for supervisors to continue to increase transparency when it comes to the authority itself disclosing more information on the supervisory model and the methodology used to evaluate the risk profile of individual banks, while retaining their “ secrecy ” when it comes to sensitive information concerning individual banks. this should enable markets to better understand the supervisory actions, enhance accountability of the supervisors in front of the general public while protecting market - sensitive information. tackling the issue of board effectiveness, there is a growing consensus nowadays that welldesigned committee makes important prerequisite for qualitative decision - making in central banks. the role of the committee for sound policy making is probably best noted by warsh ( 2015 ) in his observation that “ monetary policy is made neither by rule nor by discretion. it is made by committee ”. the