increase, the benefits from multilateral netting at an industry level have become increasingly important. before i briefly share with you how our participation in the cls has grown over the years, allow me to go down memory lane for a short while. foreign - exchange settlement risk – being the risk that originates from a situation where, in a foreign - exchange trade, one party has irrevocably paid a currency and the counterparty subsequently fails to meet its side of the deal by not delivering the other currency on time – captured the attention of regulators as a major source of systemic risk following the spectacular collapse of bankhaus herstatt in germany in 1974. the creation of the cls goes back to regulatory concerns around the collapse of bankhaus herstatt. in march 1996, the committee on payment and settlement systems ( cpss ) at the bank for international settlements ( bis ) published the so - called allsopp report titled settlement risk in foreign - exchange transactions – a strategy for addressing foreign - exchange settlement risk. this report called for action from the private sector to address settlement risk in the foreign - exchange market. the response of the private sector led to the establishment of the cls and the launch of the cls system with 39 members and seven currencies : the bis central bankers ’ speeches australian dollar, canadian dollar, euro, japanese yen, swiss franc, uk pound sterling, and us dollar in september 2002. since then, the system has evolved to the current state where foreign - exchange transactions in 17 currencies are settled with a peak volume to date of over 2 million transactions per day and a peak value of more than us $ 10 trillion per day. in its evolution, the cls added four more currencies in september 2003 : the danish krone, norwegian krone, singapore dollar, and swedish krona. in december 2004, a further four currencies were added to the settlement service, namely the hong kong dollar, korean won, new zealand dollar, and south african rand. the currencies of israel and mexico were implemented on the system in 2008. joining the cls in 2004 was a major achievement for south africa given the stringent eligibility criteria. in briefing parliament at the time about the risk management, liquidity, and efficiency benefits of the cls system, then minister of finance, mr trevor manuel, put it rather succinctly, and i quote : “ the inclusion ( … ) demonstrates that the south african payment system provides

yves mersch : financial stability – quo vadis? speech by mr yves mersch, governor of the central bank of luxembourg, at the seminar on financial stability, central bank of the republic of turkey, ankara, 21 october 2008. * * * let me start by thanking the central bank of turkey for having provided the opportunity to present my views on financial stability, likely the most discussed policy issue these days. i shall not dwell on the description of where financial markets and economies stand today as this is well known by this audience. instead, i shall discuss the evolution of financial stability frameworks in general – and in the eu in particular – and, profiting from the ongoing financial markets crisis, i shall draw lessons that could guide us in enhancing the eu framework of financial stability. noblesse oblige, i will stress the crucial role played by central banks in that endeavor given the accrued importance of liquidity in preserving financial stability in the modern world of structured finance. the bottom line is that we will have to go well beyond implementing changes in accounting rules, in the modus operandi of rating agencies and in the risk management procedures of financial institutions. this is hardly a time to herald the joy of central banking! at the time of writing, news of financial instability and ample central bank - coordinated increases in liquidity fill up our screens. lehman brothers holdings filed for chapter 11 bankruptcy protection a seminal event in the intensification and broadening of financial turmoil. bank of america purchased merrill lynch for $ 50bn ; in an unprecedented action, the fed agreed to provide an $ 85bn loan to aig in exchange for an 80 percent stake in the troubled insurer ; fortis was bailed out, with the benelux governments agreeing to inject €11. 2bn and taking a 49 percent stake in the group as a result ; the u. k. government took over bradford & bingley, nationalizing its loan book and selling its branches and savings operations to spain ’ s santander ; iceland ’ s financial system collapsed ; belgian bank dexia received a €6. 4bn capital injection from belgian, french and luxembourgish governments. huge public sector interventions were set in motion in the united kingdom, france, germany, ireland, denmark, austria and switzerland among others either in form of guaranties, recapitalizations or distressed assets relief. in the u. s., the treasury obtained congressional approval for sweeping powers to purchase $ 700bn worth of illiquid