1.IntroductionLadies and Gentlemen, I thank you for the invitation to be present at this illustrious occasion, congratulating and celebrating the successes achieved by such talented individuals as yourselves. The Spire Awards have over the last four years become the benchmark for superior performance by dealers in the domestic bond market and the institutions which they represent. Allow me to express my personal congratulations to all of you who have been nominated for various award categories, especially the winners of these coveted awards. One is reminded at occasions like these, how sophisticated and mature the domestic bond market has become since the days (barely eight years ago) when the South African Reserve Bank still used to be the sole market-maker in government bonds in South Africa. Somehow, it is a pity that we did not have the Spire Awards in those years, because the Reserve Bank would have been the winner in all categories! Having said this facetiously of course, I am nevertheless thankful for the role which the Reserve Bank has played in the development of the market for government bonds. For example, in 1990 the Bank started to quote firm two-way prices in certain benchmark government bonds and traded in minimum amounts of R1 million with a spread of two basis points between the buying and selling yield. The minimum amount was later increased to R5 million and in 1995 the minimum amount was fixed at R10 million, with the spread usually kept at 3 basis points.  The Reserve Bank’s transactions in government bonds increased substantially in those years in accordance with its objective of establishing an active secondary market in government bonds. This market has witnessed significant changes over the last eight years. For example, trading on the gilts floor of the Johannesburg Stock Exchange came to an end in November 1995. Bond trading after that date shifted to the Bond Market Association (BMA) which operated an informal screen and telephone trading system with the Universal Exchange Corporation Ltd (Unexcor) as its clearing house. The Rulebook and underlying principles of the official bond market were approved in March 1996 and the Bond Exchange of South Africa (BESA) was licensed to trade on 15 May 1996. BESA introduced various operational and regulatory changes over the years to enhance competitiveness and compliance with international standards. One of the major improvements was the shortening of the settlement period. It is now hard to believe that bond trades settled on the so-called second-Thursday principle (i.e. up to 14 days after the trading day) until 17 November 1997 when the T + 3 settlement principle was introduced, thereby significantly lowering the settlement risk associated with bond trading. I am also aware that there are presently efforts underway to reduce this settlement period even further. Whereas the Reserve Bank used to be a very active player in the bond market in years gone by, it has subsequently assumed a much more passive role in the daily trading and marketing of government bonds. However, it is still very much involved and aware of the most recent developments through its representation and participation in various committees and other platforms such as the Debt Issuers Association; the Bond Advisory Committee; the Stakeholder Forum of the Bond Exchange; the South African Institute of Financial Markets; and the Primary Dealers Committee. In addition to these endeavours, the Reserve Bank administers the weekly government bond auctions on behalf of the National Treasury and conducts a joint surveillance function of the Primary Dealer Banks. It was not without a sigh of relief that the Bank’s market-making role came to an end in 1998 when the National Treasury transferred this function to a panel of primary dealer banks, freeing the Bank to concentrate on its core business, namely the implementation of monetary policy which is the topic that I understand best. So, please allow me to briefly look at recent market developments in the world and in South Africa and to conclude m