1. IntroductionFairly early in the second millennium, some time in the course of the eleventh century, the renowned Persian philosopher and poet Omar Khayyám, also known as the tentmaker of Naishapur, wrote the following verse: "The Bird of Time has but a little wayTo fly -- and Lo! the Bird is on the Wing"(from The Rubáiyát) Now, nine hundred years later and in the closing months of the same millennium, these words of wisdom become very appropriate once again, referring of course at this juncture to the Y2K Problem of our modern electronic age. We can with all justification quote Khayyám and say: "The Bird of Time has but a little wayTo fly -- and Lo! the Bird is on the Wing" I believe that this Conference will serve to bring this message more clearly to all parties concerned, and particularly to the financial regulators and supervisors of the Southern Africa region. Time to prepare our financial institutions and systems for this major event of the switch-over to the new millennium is indeed running out. It is too late now to blame the designers and suppliers of electronic equipment for not having incorporated in the tools we use today four-digit date facilities. This will be tantamount to blaming Henry Ford for not having provided facilities for a CD player in his Model T Ford of about a hundred years ago.The distance already covered by our Bird of Time took us beyond what the experts in this Y2K exercise will describe as the sensitisation, awareness, or risk identification phase. Those of us who have not gone through these preliminaries may have missed the boat already.Looking through the programme for this Conference, there is a strong focus on the second and third phases, referred to as actions of remediation and of testing. I hope that most of our participants in this Conference find themselves, together with the Reserve Bank, already well advanced into these secondary stages of preparation for the switch-over date.Tomorrow's meetings will proceed into a discussion of the final phases of risk assessment and contingency planning. I believe in this game the best advice for contingency planning is to provide for worst case scenarios, and eventually to enjoy the pleasure of having been wrong and unnecessarily pessimistic.I must congratulate the organisers of this Conference for putting together a very well-structured and detailed programme. All the aspects and phases of this challenging exercise will be covered in the discussions of today and tomorrow at this Conference. 2. The importance of the Y2K problem for the global financial marketIt is not necessary to elaborate on the importance of electronic data processing and communication systems for financial institutions and markets. It is, therefore, understandable why there is great concern that financial systems will be severely disrupted when the year 2000 arrives and computer systems have not been corrected to be able to process dates into the next century. Taking account of the extensive globalisation of financial markets, the exploding volume of worldwide cross-border transactions and the integrated inter-relationships of financial institutions and markets throughout the world, disruptions, if they do occur on any large scale, will not remain localised.Just as the East Asian financial crisis of last year had a contagion effect and spread throughout the rest of the world in a matter of months, a breakdown in computer systems as a result of a Y2K-bug infection in any important financial centre will spread to other places. The only difference will be that in case of a Y2K problem, the transmission mechanism is open, uncontrollable and instantaneous. The potential for severe disruption of the global financial system is enormous and could have dire consequences.Because of possible "knock-on" effects or "chain" reactions, it is imperative that all countries in the world take the necessary actions to remove the Year 2000 threat. These actions can best be initiated and monitored by governments and financial regulators.There will be a temptation for countries that do compl