FROM THE OFFICE OF PUBLIC AFFAIRS

Good afternoon. I would like to begin by thanking the Bond Market Association for co-hosting today's seminar. Today's jointly sponsored effort demonstrates the close cooperation between industry and government, in managing our financial markets. The Treasury Department strongly encourages and supports seminar programs promoting continuing education of this nature.

This is the 5^th Annual Treasury Auction Seminar. This forum began as a method to help educate the dealer community on auction rules and to keep market participants abreast of rule changes, interpretations, and operational issues. Our feedback, from past seminars, has been that this educational outreach has been effective and, as capacity attendance shows, is actively supported within the dealer community.

Educational forums such as this one, supplemented with dealer visits, have helped to reduce errors and promote best auction compliance. Dealer visits will continue to be utilized in support of Treasury's voluntary compliance program. Indeed, most auction errors are self-reported and this adds to the credibility of the program.

I'd like to digress for a moment to express on behalf of the Treasury Department, an acknowledgement of the industry's efforts in quickly re-establishing a viable secondary fixed income market, following the tragic events of September 11^th. I want to thank the BMA for their critical efforts in facilitating communications among members and regulatory authorities. I want to express our appreciation for the tireless efforts of the operations and compliance staff, during this difficult period, in support of trading activity. Market participants courageously answered a great technical, physical and emotional challenge.

The US treasury market remains the broadest, deepest financial market in the world. To maintain our role as leader in fixed income markets, Treasury is continually striving to stay at the leading edge of technological advances in debt issuance. Our primary strategy, in the coming months, will concentrate on targeting the broadest possible investor audience for participation in on-line direct competitive and non-competitive bidding. While not a new initiative, it is now a refocused one, born out of the advances in the Treasury's Bureau of Public Debt's systems and operational improvements over the past few years.

We believe that it is especially important to continue to "grow" our base of direct competitive bidders in order to sell our securities at the lowest possible price. This benefits Treasury's principle client - the American taxpayer. While open to all market participants, we are especially encouraging bidders with restricted or limited access to intermediaries who are not now bidding at all, to bid directly in our auctions. These entities will participate directly using TAAPSLink, our IP browser-based bidding mechanism that was implemented in 1998. TAAPSLink is now being used by approximately 1,200 small- to medium-sized submitters around the country to directly participate in Treasury's auctions.

In conclusion, I know that today's program will serve to be informative and continue to promote the goal of voluntary compliance with Treasury's auction and buyback rules. Thank you for allowing me to speak to you today, and I hope the remainder of your seminar goes well.