Dimitar Bogov: Activities and developments in EU payment systems
Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia,
at the Seventh International Conference on Payment and Securities Settlement Systems,
Ohrid, 6-9July 20414.
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Ladies and gentlemen, esteemed colleagues,
It is a great honor and privilege to open the seventh conference on payment and securities
settlement systems. This conference has had an international character for several years
now, and this year, the list of participants and guests is even broader. Apart from the
National Bank of the Republic of Macedonia, we must give due credit to the Central Bank of
the Netherlands and the Central Bank of Portugal for making this conference a success.
Without their support and active participation, the quality of the conference would not be at
the same level. Therefore, I would like to acknowledge the traditional cooperation of the
National Bank of the Republic of Macedonia with the Central Bank of the Netherlands and
the Central Bank of Portugal, and at the same time to salute this year's participation of the
representatives of the central banks from Central, Eastern and Southeastern Europe, as well
as representatives of the Committee on Payment and Settlement Systems at the Bank for
International Settlements, Euroclear and Commerzbank. To us, the perennial active
participation of the representatives from the domestic payment system is of great importance
as well.
Esteemed colleagues from the financial sector! Allow me to tackle several important aspects
that will be included in our discussion in the days ahead of us.
First, the conference will be opened by promoting the Red Book of the Payment, Clearing
and Settlement Systems of the Republic of Macedonia, which was issued at the end of
last year, in cooperation with the Committee on Payment and Settlement Systems at the
Bank for International Settlements (BIS). This publication is important for the Republic of
Macedonia because it further improves the understanding, at both national and international
level, of the functioning of the payment and securities settlement systems. At the same time,
this project promoted the process of harmonization of the payment statistics of the National
Bank with the payment statistics of the European Central Bank, which is an ongoing process
that includes other banks, and is expected to facilitate complete methodological unification
and readiness to disseminate information in accordance with the requirements of the
statistical system of the European Central Bank.
Allow me on this occasion to welcome Mr. Emanuel Freire, who will promote the Red Book of
the Republic of Macedonia and present the activities of the Committee on Payment and
Settlement Systems.
Second, this conference will focus on the integrative processes in the field of payments
within the European Union. We are all aware that the financial integration in Europe is
important for both the increase of competition and the support of economic growth. Ever
since the single currency was introduced, the integration of financial markets has advanced
much faster in terms of integration in the field of payments. However, the crisis has
conditioned a segmentation of the European financial markets, while the convergence of
payment habits has been an ongoing process supported in large by the European
SEPA project. The implementation of SEPA project has inspired new integration processes
in the European Union, which proved to be necessary in times of economic and financial
instability, such as building the banking union by establishing the Single Supervisory
Mechanism, the Single Resolution Mechanism for banks and the unique rules regulating the
deposit insurance schemes. Therefore, the integration in many fields is a consequence of the
monetary integration in the European Union, which was timely foreseen in the field of
payments where we have gradual and continued integration.
However, the ultimate goal of SEPA is not to make the users of payment services behave
uniformly, but to harmonize principles, business practices, and rules and technical standards
for conducting payments. In that respect, recently, the main focus was the migration of
credit transfers and direct debts under the SEPA standards, with the deadline for the
members of the euro area being August 2014. In the period ahead, the efforts within the
SEPA project are expected to aim towards harmonization of card payments. This is
understandable considering the fact that the latest empirical research confirms the positive
influence of the transfer from currency to electronic payment instruments on consumption,
trade and economic growth, with the effects of card usage being the greatest, compared to
other payment instruments1.
Third, besides novelties in the field of payments, this conference traditionally includes the
trends in securities settlement systems. Therefore, the discussions will be aimed towards
the implementation of the "TARGET2 Securities" project, which is expected to facilitate
realtime cross-border settlement of transactions in securities on the "delivery versus payment"
principle, by integrating transaction accounts and securities accounts on a single platform.
This project is aimed towards strengthening the integration of the financial market
infrastructure, which is expected to contribute towards increasing competition, lower costs for
settlement and greater financial stability. Discussions related to this topic will also include the
latest trends in collateral and liquidity management taking into account the latest changes in
the monetary policy setup in the euro area.
Fourth, this conference will especially focus on the novelties in the proposed revision of
the Payment Services Directive. The proposed amendments to the directive aim towards
increasing the competition in the field of online payments related to e-commerce, by
removing the barriers that the interested providers of these services face to enter the
common market of the European Union, reducing the costs for the consumers when
conducting card payments, as well as by raising the security level for online payments. The
discussions on this topic are especially important for the Republic of Macedonia at this point,
having in mind that the IPA project was initiated through the funds of the European Union,
aimed towards implementation of the directives in the field of payment systems and financial
markets. Therefore, tomorrow we will hold a panel discussion in order to encourage active
participation of the Macedonian financial sector in the domain of card payments, e-commerce
and innovations, in general, as well as of the National Bank from the aspect of its role in the
payment system of the Republic of Macedonia.
Fifth, the social welfare is greater in countries with higher level of financial inclusion, which
implies access to financial services to as many people, especially those with lower income.
In that context, this conference will also induce discussions about the effects of the greater
financial inclusion on the economic growth and income inequality. Furthermore, financial
inclusion will be considered from the aspect of integration of the payment trends outside the
formal financial sector. One of these channels is the flow of remittances, which are of great
significance for the countries in the region. In that regard, the discussions will particularly
focus on determinants of the choice of the payment channel through which emigrants
transfer remittances.
Sixth, from the aspect of institutional changes, we will cover the new Euro Retail Payments
Board, as a successor to the SEPA Council. The Migration of credit transfers and direct
debits under the SEPA requirements, will not resolve all payment-related issues which will be
on the agenda of the Euro Retail Payments Board. Because of that, the Board is expected to
intensify its efforts for further integration in the field of card payments, innovations and
security.
Seventh, during the course of this conference we will also discuss virtual currencies, taking
into account the public interest about the effects that these currencies have on the payments.
Although these currencies are not economically significant and therefore, do not pose a risk
to the price and financial stability, they do however pose significant risks to the individual
users of the currencies. These risks, however, could impair the reputation of central banks
given the fact that virtual currency schemes operate as retail payment systems, but are not
regulated and monitored.
Please allow me to briefly conclude that this conference on payment and security settlement
systems has grown into a platform of active cooperation between the central banks, both in
our region and beyond, in Europe, and we hope to continue hosting it in the future to assure
faster and complete integration in the European Union. It is really a great honor to have
representatives from the central banks of the EU member states as well as from the
candidate countries attending this conference, especially having in mind that on the last day
of the conference some of them will have presentations and share their experiences in
the domain of payment systems.
Ladies and gentlemen,
Now, allow me to declare the seventh conference on payment and securities settlement
systems open! I would like to wish the chairman Mr. Michiel van Doeveren and his
colleagues a successful conference.
I hope the weather will be fine and you will enjoy the beauties of Lake Ohrid, and in the
afternoon and in the evening, you will have the opportunity to visit the city of Ohrid, which is
one of the best preserved material and spiritual legacies witnessing the millennial existence
of our culture and historical heritage.