mr kelly ’ s observations on y2k compliance and the banking system speech by edward w kelley, jr, a member of the board of governors of the us federal reserve system, to the media studies center, new york, new york on 10 march 1999 good morning. my thanks to the media studies center and the freedom forum for inviting the federal reserve to participate in this meeting and, more important, for the initiative of sponsoring this gathering to discuss what i believe to be a critically important topic. as you may know, i have devoted a good deal of time to y2k preparation over the last two years, and in that process i have talked to a wide spectrum of people. i have reached the conclusion that, now that the country is at last aggressively addressing the problem, the most important single element in our successfully navigating through the challenges presented by the ‘ millennium bug ’ is how the public responds to it. there are very few places in our national life where the statement that ‘ attitude can affect outcomes ’ is so compellingly demonstrated as in the banking sector, particularly as we work to address y2k. you will no doubt agree that the best way to engender a strong and positive public attitude is through open and candid discussion, which i would like to encourage by briefly addressing three key questions. first, what are the critical components of public confidence in the banking system, and how are the industry, its regulators, and the central bank working to earn public trust in the y2k context? second, what are we confident about and what are we concerned about? when the media assesses the financial risk element of the y2k story, these may be appropriate places to start. and finally, what do we hope the media will do in the coming months? i believe there are four important elements needed for public confidence in banks and the banking system, and each is being addressed as we prepare for potential y2k problems. bank customers need to be assured • of ready access to cash and other funds and bank services • that their bank records are secure • that competent and energetic government supervision is being conducted • that deposit insurance is in place and inviolate i want to elaborate on these elements because i believe that public understanding of the banking industry ’ s y2k preparations will help maintain public confidence. first, cash availability. we do not see any need for a vast surge in demand for cash late this year, but if that should occur, it is the federal

niklaus blattner : system stability and security of the systems summary of a speech by prof dr niklaus blattner, vice - chairman the governing board of the swiss national bank, at the luzerner tage fur informationssicherung ( lutis, conference on information security ), lucerne, 25 may 2004. the references for the speech can be found on the swiss national bank ’ s website. * * * the stability of the banking system and the security of the financial market infrastructure - including the stock exchanges and especially payment and securities settlement systems - have become an important concern of central banks all over the world in recent years. this has notably happened against the background of the numerous financial crises witnessed during the past decades. moreover, events such as 9 / 11 have heightened awareness for the security of the financial markets and other infrastructures. in switzerland, the growing importance of system stability has also been reflected in the new national bank act, which entered into force on 1 may 2004. within the framework of its principal mandate of pursuing a monetary policy in the interests of the country as a whole while at the same time ensuring price stability, the swiss national bank ( snb ) is legally obliged to make a contribution to system stability and to facilitate and secure the operation of cashless payment systems. in implementing its mandate, the snb takes preventive measures as well as measures aimed at overcoming crises. for instance, in a crisis the national bank plays an important role in providing liquidity. with the new act, the snb specifically bears the responsibility of overseeing the systemically important payment and securities settlement systems. the operators of such systems will in future have to meet certain minimum requirements, which will also include requirements with regard to information security. secure and reliable information and communications structures are an essential precondition for the smooth functioning of the financial system. in the context of its mandate, the snb limits itself to systems - relevant aspects in these areas. systems - irrelevant problems concerning individual banks or payment systems, by contrast, are explicitly not a part of its mandate. this is based on the conviction that the problems in the financial system must be solved by the market itself whenever possible.