As the BNB is not entitled to direct legislative initiative, we are going to immediately submit this draft to the Ministry of Finance so that they move it on to the National Assembly. Therefore,  2/5  BIS - Central bankers' speeches  when we speak of the legal framework, it is not so much about our readiness with drafted laws, but about whether we will have a working Parliament and political will. If these are present, the legislative programme can be fully completed in the next few months. The fourth group of tasks deals with the technical preparations and the entire logistics of the process of accession to the euro area. With regard to this group of tasks, not a small part of the burden falls on the Bulgarian National Bank and commercial banks. We are working intensely and systematically to fulfil this group of tasks. I will give a few examples to illustrate this. As a Central Bank, we have already received the full documentation on the minting of the Bulgarian euro coins. You probably know that at the end of last year, together with the Minister of Finance, we signed a Memorandum on this issue with the European Commission and with the Eurogroup that represents the euro area Member States. Under this memorandum, we have received the full set of documents from the European Commission and we are preparing for the first tests of minting the Bulgarian euro coins.
Despite all that, foreign exchange market participants and central banks in 1974 found Herstatt risk to be an intractable problem. All that was left to banks was to manage it. And so it went for 20 years. Then, in the mid-1990s, Bill McDonough, president of the New York Fed, identified the continued existence of Herstatt risk as a challenge to be met. As chairman of the Committee on Payments and Settlement Systems of the G-10 Central Bank Governors, he spurred the central bank community to take a fresh look. This time, the combination of new financial analysis and the rapidly expanding availability of raw computing power made the difference. •  In what today still stands as a landmark in analysis of the connection between operational and financial risk, the 1996 Allsopp report demonstrated in a straightforward manner just how much financial risk existed in the bilateral settlement of gross principal amounts of foreign exchange – an analysis that provided the insight into how a settlement facility could reduce that risk, and into understanding how settlement management could improve in the interim. •  Raw computing power was essential for the design and risk management of any proposed new settlement facility. Through scenario analysis and stress testing, CLS’s founders could determine the necessary capital and liquidity needs, default handling procedures, and the general benefits of multilateral vs. bilateral netting. The inherently multicurrency nature of foreign exchange settlement of course enhanced the challenge.