In addition, we increased our international commitments to the IMF and concluded swap agreements with the central banks of Iceland, Latvia and Estonia so as to be able to give them loans in foreign currency if necessary. The Swedish banks also borrowed significant amounts in foreign currency from other central banks and made great use of the government borrowing guarantee. To manage the situation, we were forced to rapidly establish a swap agreement with the US central bank (the Fed), which gave us the possibility of borrowing USD 30 billion. The Fed concluded similar agreements with several other central banks as it had an interest in ensuring that the European banking system did not collapse as a result of a shortage of dollars. We also concluded a swap agreement with the ECB, which gave us the possibility of borrowing EUR 10 billion.13 In addition, we also ensured that it would be possible to borrow from the Bank for International Settlements (BIS). The agreement with the Fed has now expired and it is not likely that we would be able to conclude a similar agreement in the event of a new crisis, among other reasons because the Fed has received criticism at home for its support to the European banking system. The question of a suitable size for the foreign currency reserve led to some long discussions among the Executive Board. It was not easy to calculate how large the foreign currency reserve should be, and different Executive Board members had differing views on the matter.
In this regard, payment systems researchers warn that if left unattended or unresolved these challenges could eventually overwhelm us and hinder the effectiveness of payment systems and hence commerce. Ladies and Gentlemen, I would therefore like to salute the SADC Payment Systems Project Team for showing good leadership. This has ensured that the basis of the evolution of payment systems in the region is collaborative and consultative, which is critical to the overarching objective of regional economic co-operation and integration. In this regard, not only have most SADC member country implemented real time settlement systems, but these developments have also been anchored on common and jointly developed business and technical specifications. Other developments include the introduction of automated clearing houses. This particular development has positively contributed to improving the processing efficiency and reducing risks associated with cheque transactions. Most importantly, perhaps, is that this development has enabled the introduction of systems such as direct deposits (or credits) and direct payments (or debits) which are truly convenient mechanisms for handling the direct deposits of salaries and wages of workers amongst others. These direct-credit and direct-debit systems are also used to handle regular monthly bills for utilities and could potentially be used in administering pensions and many other government benefits. It is also instructive to note that these developments are supported by sound legal bases that ensure that payment systems in the region are safe, practical and meet international best practice. Ladies and Gentlemen, payment instruments and mechanisms are not new in this region.