Members of the press, other guests and colleagues On behalf of the South African Reserve Bank, I would like to welcome you to the release of the March 2011 edition of the Financial Stability Review; the fifteenth publication in this series. The Bank knows that it is not the sole custodian of financial‑system stability. Financial stability is a responsibility that it shares with other role‑players and it is well placed to take a leading role. To pursue the maintenance of financially stable conditions and contain systemic risk, the Bank continually assesses the stability and efficiency of the key components of the financial system and formulates and reviews policies for intervention and crisis resolution. The assessment largely takes the form of the Financial Stability Review. I turn now to the Financial Stability Review and highlight some of the key issues that the March 2011 edition addresses. First, the Review indicates that during the second half of 2010 global macrofinancial conditions improved broadly, althoughpockets of vulnerability and risk remain and significant policy challenges still need to be addressed. Global economic activity moderated somewhat as the brisk recovery phase following the global financial crisis turned into a slower and, hopefully, more sustainable recovery. The multi‑speed nature of the recovery continues with subdued economic growth and high unemployment in advanced economies, and buoyant economic activity and rising inflationary pressures in many emerging market economies. The financial risks in advanced economies that might impact on the stability of the South African financial system, and which are discussed comprehensively in the Financial Stability Review, are vulnerabilities in the euro area;banking‑sector vulnerabilities;negative sentiment and declining prices in real‑estate markets in anumber  of advanced economies; anda broadening of the concept of global imbalances as trade, fiscal and investment imbalances have increased. Emerging market economies as a group remained important drivers of global economic growth in the second half of 2010 with countries in developing Asia recording the most rapid growth among all of these countries. Emerging market economies are, however, also exposed to lingering downside risks in the form of rising inflationary pressures, the possibility of sudden reversals of capital inflows and sharp increases in the level and volatility of commodity prices. In many sub‑Saharan African countries economic growth has returned to pre‑crisis levels, but growth prospects will depend on a sustainable recovery in the global economy. Recent political instability in the Middle East and North Africa region, and the resulting rise in oil prices, coupled with rising food prices, pose significant challenges to the economic outlook in the sub‑Saharan Africa region. Various groupings of financial authorities and international standard setters, including the Group of Twenty Forum, the Basel Committee on Banking Supervision and the Financial Stability Board are actively contributing to initiatives to create a stronger international regulatory framework. At the same time, countries have responded by reforming national regulatory systems. The roles and responsibilities of central banks in regulating and supervising financial systems have been extended in some jurisdictions. Principles are being developed to deal with the “too‑big‑to‑fail” moral hazard problems and to increase the capacity to absorb losses of systemically important financial institutions. In addition, regulatory gaps are increasingly being closed in various jurisdictions by extending the regulatory perimeter to include hedge funds, private equity funds and rating agencies, and more transparency and accountability in the derivatives market are envisaged. It is trusted that these initiatives will contribute to a more stable global financial system. In South Africa, despite positive signs of economic recovery, high levels of unemployment continued to place a damper on activity in the domestic financial system. Neverth