They meet all of the functions that money shall have: they make use of the same arithmetical unit, their value is guaranteed by the Riksbank’s monetary policy mandate and, as technological advances continues, these account-based systems offer increasingly efficient mediation of payments. Account-based means of payment have since come to replace payments with banknotes and coins to an increasing extent right up to the current situation. Nowadays, some account-based payments can also be made in real time, a property that only cash payments could boast once upon a time, when the payment was made after banknotes changed owners. 4 [6]  Without cash, the general public loses access to central bank money If cash were to disappear completely, the general public would only have access to account-based private bank money. The banks, on the other hand, continue to have access to central bank money as they have accounts in the Riksbank. So is this a problem? We return here to the central element of the monetary system mentioned earlier – confidence in the system. During normal times this is not a problem. The banks can normally offer a sufficiently high interest rate to attract investors. But in times of financial stress, which unfortunately occur with some regularity, both banks and the general public want access to the central bank’s money, which is free from credit risk. The deposit guarantee alleviates the problem of a lack of confidence but does not entirely resolve it.

(2007): Overborrowing and Undersaving: Lessons and Policy Implications from Research in Behavioral Economics, Discussion Paper, Federal Reserve Bank of Boston; Heidhues P. et al. (2010): Exploiting Naivete about Self-Control in the Credit Market, American Economic Review 100; Laibson D. et al. (2000): A Debt Puzzle, NBER Paper No. 7879; Meier, Sprenger (2008): Charging Myopically Ahead: Evidence on PresentBiased Preferences and Credit Card Borrowing; Azfar O. (1999): Rationalizing hyperbolic discounting, Journal of Economic Behavior and Organization, Vol. 38. 9  Hume, D. (1739), A treatise of human nature. 4  BIS central bankers’ speeches  encouraging sign, as it shows that deleveraging is not always inconsistent with economic growth. Turning to the indebtedness of households, the diagnosis does not point to easy solutions. Thus, regulatory measures at the microprudential level that enforce stronger discipline on the supply side of credit are all-important. Complementary macro-measures aimed at preventing excessive exuberance should also be deployed. In this context, I am referring to interest rate policies which – whenever feasible – “lean against the wind”, but also to more targeted macroprudential measures which directly address the dynamics of the credit market. The countercyclical capital buffer is an important example. Besides, facing more directly the behavioural biases that are at the root of the problem requires an increased level of “awareness”. In the words of Shefrin (2012), raising people’s awareness means “reminding ourselves of our psychological fallibilities so that we can avert some crises and mitigate others”.10 More specific consumer protection regulations or system design measures come as a second step.