. while the enabling legislation for “ twin peaks ” is still in the process of being finalised, some of the support measures recently announced by the sarb for african bank were informed by the principles contained in the g20 / fsb key attributes for effective resolution regimes, which are expected to feature in the new legislation. allow me to make a brief comment about the measures announced by the sarb last sunday. the legal structure of curatorship will facilitate an orderly, structured, and fair approach to addressing the current challenges at african bank in an effort to secure a viable future on the basis of a transformed business model, while ensuring minimum disruption to our financial and credit markets. the proposed solutions were developed in a collaborative process between the public and private sector. the leadership and commitment shown by south african commercial banks and the pic in bis central bankers ’ speeches underwriting the capital raising for the envisaged “ good bank ” bears testimony to the strong underpinnings of our banking and financial system, the resilience of which will be enhanced by these measures. once the necessary legislation has been enacted, the current financial stability committee ( fsc ) of the bank, will be replaced by the financial stability oversight committee ( fsoc ). this committee will be chaired by the governor with the membership of this committee comprising the sarb, the financial services board ( fsb ) and national treasury as an observer. the primary mandate of the fsoc will be to monitor and assess systemic risks to financial stability and make recommendations on how to counter or eliminate these risks. in the execution of its financial stability mandate, the bank relies as far as possible on the efficient functioning of market forces to ensure the stability of the financial system. thus, the bank ’ s action will be guided by the principle of the containment of systemic risk. given the large representation from the insurance industry in the audience today, i would like to briefly outline some of the regulatory changes confronting the insurance industry. as you are aware, some four years ago, the fsb and the south african insurance industry embarked on the solvency assessment and management ( sam ) project. this project is directed at establishing a risk - based supervisory regime for the prudential regulation of both long - term and short - term insurers in south africa. in essence, the objective is to enhance the monitoring and management of risk so as to ensure that the capital requirements are appropriately aligned with the underlying risks of an insurer. under the twin peaks regulatory regime

- demonstrating their commitment to macro - economic discipline through both fiscal consolidation and monetary policy directed at effective price, and exchange rate, stability. and there is no doubt that all european union member states have made huge progress towards macro - economic stability over the past few years. the betting in financial markets is therefore that when, in early may, the heads of state come to make their decision, a broadly based euro will indeed go ahead. the nagging concern is whether this determined pursuit of macro - economic stability will be maintained - whether in fact the degree of macro - economic convergence that has been achieved is likely - in the terms of the treaty - to be “ sustainable ”. a particular worry is that macro - economic stability, on its own, is not enough. it has not been enough to prevent the progressive emergence of very high, and very different, levels of unemployment in a number of the major continental european economies. unemployment has been for some considerable time, and it remains, much the most urgent and important economic issue confronting us in europe. i do not suggest for a moment that the right answer would be to abandon macro - economic discipline and revert to old - fashioned demand management policies. in anything other than the very short term that would be likely to make matters worse. i share the broad consensus view that europe ’ s unemployment problems originate essentially in rigidities on the supply - side of the economy. the point is that unless we are all more successful in bringing down this structural unemployment, through micro - economic policies designed to improve structural, supply - side flexibility, then some countries could find it difficult to continue to live with a common macro - economic discipline without significant tensions. some people here on the continent who share this concern are inclined to argue that if a euro - participating country were to find itself in this situation - and given that it would have no macro - economic way out, for example, through exchange rate adjustment, or monetary relaxation, or fiscal stimulus beyond the limits of the stability pact - it would then have an overwhelming incentive to take the sort of supply - side measures which have proved so difficult to implement hitherto. i am not sure that you can necessarily rely upon that making life very much easier. but what i think this discussion points up, is the broader conclusion that if the euro is to go ahead in current conditions, as i assume that it will, then supply - side flexibility will become more crucially important that ever across the whole euro area. the chancellor of the exchequer