that generally meant outside the central bank! ( although there were some exceptions, including dnb ). these were the times that we now sort of nostalgically refer to as the great moderation. but then, however, came the great financial crisis. and we moved from the great moderation to the great recession. and, here in europe, to the emu crisis. these events painfully reminded us that financial instability can indeed severely damage the broader economy. has the recent crisis altered the general view we held for so long? this is a relevant question for us, central bankers, given two well - known pitfalls we have to avoid as monetary policy - makers. the first pitfall is reacting too late. during the interwar years, for instance, central banks in the major economies were “ prisoners ” of their own economic orthodoxies and so made mistake after mistake. my institution, too, was dogmatic in believing in the benefits of the gold standard, even in the face of the huge losses due to the devaluation of the british pound. the second pitfall is that we ’ re so afraid of reacting too late, that we respond too soon. how can we avoid both these traps? i believe there are two preconditions that we must meet. first, we should protect the independence of central banks in monetary policy matters, in all circumstances. the 19th century economist david ricardo already explained that governments would almost certainly abuse their power to issue paper money if, for instance, they were forced by war into creating money. he argued that central banks should instead be governed by individuals entirely independent of government. central banks should – [ quote ] “ never, on any pretence, lend money to the government, nor be in the slightest degree under its control or influence ”. [ unquote ] bis central bankers ’ speeches there are certainly many episodes in our history, when the central bank ’ s relationship with the state has come under pressure. for example, after belgium – at that time known as the southern netherlands – became independent in the 1830s, the dutch government ’ s deficit soared to unprecedented levels. and when, at that time, dnb was unwilling to provide credit to the state in return for treasury notes as security, the king sighed that he could expect little help from this institution. all i ’ m saying here is that preserving central bank independence is a delicate balancing act, but also one that ’ s vitally important to pursue. the second precondition

, safely, at low cost and in a user - friendly manner. the means of payment itself – our money – must be universal, because money is only useful if it is widely used. this requires trust. deposit guarantee schemes and banking regulation promote trust in banks ’ deposit money. trust is also underpinned by being able to convert to another secure alternative, ie cash. norges bank assists private operators in implementing faster and safer payments. we cooperate with other authorities to oversee and supervise the payment infrastructure to ensure robustness and efficiency. privacy rules prevent unauthorised access to payment information. but there are some characteristics deposit money lacks. nor is direct and immediate settlement between two parties, without the involvement of a third party, possible without cash. the system is vulnerable to advanced attacks. having more money on deposit than is covered by the deposit 4 / 5 bis central bankers'speeches guarantee scheme involves risk. perhaps new private payment solutions may be able to offer some of these characteristics, but a possibility which is also being discussed is the introduction of electronic central bank money – in addition to cash. this possibility raises many questions which norges bank and other central banks are trying to answer. this is a long - term process and we do not yet know what the answer will be. conclusion the norwegian payment system was digitalised at an early stage and this has benefited private individuals, businesses and banks. we can be justifiably proud of our payment system. digitalisation is now going through new phases. the deliveries of customer services and the underlying infrastructure are being separated from one another, and we are witnessing the arrival of new market entrants. global platform providers are interested in the payment market. we must make full use of the opportunities to improve the payment system and we have made a start. further changes will come. today i have emphasised some of the tasks which the industry and norges bank must solve in the coming years : introduce instant payments and develop a better solution through the bro project. mobile instant payments and bro. agreement on a single alias register as a common infrastructure. a more coordinated and systematic effort to reduce cyber risk. managers and owners must be aware of their responsibility, also when operations are outsourced. we must continue the work on truly reliable contingency arrangements. we must assess whether it is necessary for risk - mitigating measures related to offshoring. and we must assess whether electronic central bank money is necessary and desirable. we all want norway, also