statements of account will specify the rate at which the currency has been converted. the automatic teller systems ( bankomat and minuten ) will also have to be adapted. moreover, banks must be prepared for people who want to make giro payments in euro right from the beginning of 1999. some large companies may also wish to pay out wages in euro before the new currency is available in the form of banknotes and coins. as mentioned earlier, it is difficult to foresee the magnitude of demand for euro services and how soon companies and individuals will switch from kronor to euro. monetary and exchange rate policy. a single currency implies a single monetary policy, which in emu will be decided by the ecb. the riksbank and the other national central banks will have the task of executing this policy. the changes for swedish banks and other financial institutions will probably not be all that great. the riksbank is likely to remain the financial sector's counterparty. the main differences from today for swedish banks are a much larger market for intra - day money and counterparties located all over europe. the detailed conduct of monetary policy is not yet clear. the final decisions are due when the ecb has been established in 1998. consequently it is the countries participating from the start that will be able to influence the conduct of policy and the organisation of activities in the new european central bank. target the conduct of a single monetary policy calls for a single system with which to handle the associated payments. target, the payment system that is now being built up, will link up all the national systems. a payment from, say, stockholm to milan will normally be executed in a matter of seconds, whereas at present it often takes a day or more. target's main purpose is to enable the ecb to conduct monetary policy but it also amounts to the establishment of a new expressway for commercial transactions. the extent to which banks and other companies use the system will probably depend on the price. what this will be is not yet clear but costs are to be covered in full. all the national central banks in the eu area will be entitled to join target, whether or not they are participating in the euro area. there is a significant risk, however, that countries outside the latter area will have more limited possibilities of using target, for instance due to restrictions on intra - day euro credit, which is important for countering fluctuations in payment flows. one of the matters discussed is that outsider banks should close the system

on the side of all ending up in a similar place, rather than on the relative degree of difficulty in getting there. the process is also fragile because some countries seem intent on strengthening their own set of standards before the international process has had a chance to reach consensus. although it is understandable that countries would want to move quickly to strengthen their regulatory regimes, such actions should not be undertaken in a way that is immutable and unresponsive to the emerging international consensus. 1 at the end of the day, to achieve harmonized standards, each sovereign nation is going to have to bend a little bit from what it believes is best for its financial system viewed in isolation. this is necessary, of course, because a series of regulatory regimes that appear best for each individual country would likely be distinctly second - best or even worse when considered collectively. the recent crisis underscores the fact that the regulatory regime needs to be harmonized and global in nature. my second concern on the regulatory reform front is that reform may be too focused on the traditional banking sector and not enough on other financial intermediation activities. of course, it is clear that we need to make the traditional banking system more resilient and robust. 2 but make no mistake, we also need to ensure that regulatory reform fully encompasses the full range of financial intermediation activity, including capital markets and insurance, over - the - counter ( otc ) trading of securities and derivatives, wholesale collateralized funding markets, and payments and settlements. this is necessary for two reasons. first, too much focus on raising the requirements on banks runs the risk of just forcing activity into the non - banking sector. second, many of the problems of the financial crisis originated outside of the banking sector. to a significant degree, the crisis was about regulatory gaps – be it gaps in terms of loosely regulated mortgage underwriting practices in the united states, the activities of bank - sponsored structured investment vehicles ( sivs ) and conduits, the providers of insurance guarantees against structured finance products such as aig financial products group, or the structured in this regard, i am considerably more worried about countries that implement standards that are more lax than the norm, rather than more tough than the norm. however, if many countries individually were to opt for tougher standards, this could raise questions about whether the international norm is too lax. work underway by the basel committee on banking supervision and others all are designed to make the traditional banking sector more robust. this