wisdom was that price stability would ensure financial stability. the crisis has shown that financial stability should be seen as a separate objective, and a number of central banks have been given explicit financial stability mandates. the bank has also been given a mandate to take a leading role in maintaining financial stability. to this end, the bank ’ s financial stability committee ( fsc ) has been reconstituted and given responsibility for macroprudential oversight and policy implementation. this is unchartered territory, and work is being undertaken both globally and domestically to determine the exact nature of such oversight as well as what appropriate policy instruments could be. without being complacent, our view is that at this stage there are no obvious threats to domestic financial stability : credit extension by banks is subdued and there is no evidence of incipient asset market bubbles. however, we remain vigilant as to the possible impact of any global financial stability or systemic banking matters that might arise. bis central bankers ’ speeches the bank ’ s microprudential responsibilities have also been impacted by global developments with respect to the regulatory and supervisory environment. the bank, as a member of the basel committee on banking supervision ( basel committee ), has been an active participant in the deliberations on banking regulatory reform. meetings of the committee have culminated in the publication of the global regulatory framework for more resilient banks and banking systems, known as basel iii, which incorporates the details of global regulatory standards on bank capital adequacy and liquidity. the changes should not have a material impact on south african banks which remain well capitalised and characterised by low leverage ratios. the proposals regarding liquidity are likely to pose a greater challenge, and it is important to recognise that it is not only south africa that faces this hurdle. given the relatively long phasing - in period allowed, these challenges are not viewed as being insurmountable. capital flows to a number of emerging markets moderated in the final quarter of 2010 and early 2011. a similar pattern was observed in south africa, and between november 2010 and march 2011 there were cumulative net sales of bonds and equities by non - residents. more recently, renewed net purchases have been experienced and year to date the net purchase of bonds and equities stands at approximately r27 billion. despite this relatively volatile pattern of capital flows the bank, with the assistance of national treasury, has continued with its policy of foreign - exchange reserve accumulation. in the 2010 / 11 financial

to accept excessive inflation, or to threaten the recovery. and the second on their instruments as 4 / 5 bis central bankers'speeches they would take the risk of cliff edge effects by exiting their covid - crisis instruments. these two views are largely wrong according to me, and i tried to explain why in the case of the ecb. based on the successful conclusion of our strategy review and forward guidance, we can be patient in navigating through a significant but temporary surge of inflation ; besides, we have beyond pepp a broad spectrum of possibilities to further run an accommodative monetary policy, thanks to our quartet of non conventional, or “ new conventional ” instruments. thank you for your attention. i lane ( p. r. ), “ the monetary policy toolbox and the effective lower bound ”, speech, 11 october ii schnabel ( i. ), “ prospects for inflation : sneezes and breezes ”, speech, 7 october 2021 iii see paragraph 8 of ecb ’ s monetary policy strategy statement 5 / 5 bis central bankers'speeches