benoit cœure : towards the retail payments of tomorrow - a european strategy speech by mr benoit cœure, member of the executive board of the european central bank, at the joint conference of the european central bank and the national bank of belgium on “ crossing the chasm to the retail payments of tomorrow ”, brussels, 26 november 2019. * * * europe has made important progress towards a true banking union in recent years. we now have a single banking supervisor for significant institutions, a single framework for resolving failing institutions, a single fund to finance those resolution activities, and we will soon have a single backstop for that fund. there are also renewed hopes that political negotiations could soon begin on a european deposit insurance scheme. the european commission has also launched an ambitious agenda for creating a capital markets union. although the pace at which co - legislators, and member states in particular, have progressed on individual commission initiatives has often been sluggish, the recent establishment of a high - level expert group might help overcome the remaining impediments and reinforce efforts to make european capital markets deeper and more liquid. 1 step by step, we are improving our financial structures to support a single market of half a billion consumers, underpin the stability of our single currency and channel savings towards financing sustainable growth. one area that has received less attention from policymakers in recent years, however, is the european retail payments market, in particular point - of - sale and online payments. it is true that a lot has been achieved at the back - end of european retail payments systems, most notably under the umbrella of the single euro payments area, or sepa. sepa allows payments to be processed across borders at the same cost, and as efficiently and safely, as national payments. more recently, the eurosystem has also introduced target instant payment settlement, or tips. this service, which was launched a year ago, enables payment service providers to transfer funds to their customers in real time, around the clock, every single day of the year. and it settles the payments in central bank money. but progress at the back - end has not translated into similar progress at the front - end, which remains fragmented, with no european solution emerging for point - of - sale and online payments. national providers in particular have not been able, or willing, to act in a pan - european manner. 20 years after the introduction of the single currency, we still do not have a european card scheme. ten european countries currently have

for price developments are broadly balanced. our monetary analysis paints a picture consistent with price stability. in particular, the underlying pace of monetary expansion remains subdued. loan dynamics are also subdued as a result of weak demand for credit but also restrictions on the supply of credit in some euro area countries. bis central bankers ’ speeches 2. outright monetary transactions ( omts ) let me now explain the decision announced by the ecb ’ s governing council in september on outright monetary transactions. the impact on financial and monetary conditions of past reductions in key ecb interest rates differed considerably within the euro area. for example, in some countries, following cuts in key ecb interest rates, the rates charged by the banking system for credit to the real economy have declined only a little, if at all. in other countries, ecb rate cuts have been fully passed through. one reason for this difference is that the cost of bank credit to firms is inevitably linked to the cost of market funding for the banks themselves. if there are fears about potential destructive scenarios, the cost of funding for banks can be affected asymmetrically across the euro area. this means that two firms that are otherwise identical and have the same creditworthiness have benefited to a different extent from past cuts in key ecb interest rates, merely because they are located in different countries. it is that distortion in financing costs that hinders the smooth functioning of credit markets and the transmission of monetary policy. it is that distortion which keeps some countries in what i have previously described as a “ bad equilibrium ”. and it is that distortion which falls clearly within our mandate to address. to counter the impairment of monetary policy transmission and to preserve the singleness of the ecb ’ s monetary policy, the governing council decided to undertake outright monetary transactions. omt interventions in government bond markets provide a fully effective backstop to avoid destructive scenarios that might threaten price stability in the euro area. the aim is to ensure that the ecb ’ s monetary policy stance is transmitted more evenly to the real economy across euro area. the ecb will conduct omts if and as long as countries comply with strict and effective conditions attached to an appropriate programme via the european financial stability facility and the european stability mechanism. conditionality preserves the primacy of our price stability mandate and ensures that omts will not compensate for a lack of fiscal consolidation. conditionality in particular preserves the incentives for governments to continue with economic and fiscal adjustments. and only if conditionality is fulfilled will the omts be