and sweden and other countries. the trend is for the number of bank branch offices and cash machines to be cut, and this is happening everywhere in the world in response to advances in technology, trends in demography and changes in consumer preferences. to some degree this is a natural evolution against which it would be pointless to stand. equally it creates problems of access to banking services, and such problems need to be resolved. problems may arise particularly for the elderly or for people with impaired mobility, but they may also arise for small businesses or for those who live in the countryside or who do not use the internet. services should not be provided exclusively to people who use the internet regularly, or only those who live in tallinn or tartu. the advances in technology have led electronic payments and internet banking to become very popular, and this has reduced the need for cash and the need for people to actually go into a bank branch. this has been driven by both supply and demand. surveys in estonia show that bank cards are ever more popular as a means of payment, while internet banking is increasingly used for banking transactions, and this trend shows no sign of abating. this means that preferences of consumers themselves are changing, and bank customers need less and less to visit their local bank or to use cash. this is an inevitable consequence of technological progress, and it must be borne in mind throughout this debate. demographic changes specifically means urbanisation, and urbanisation is happening here in estonia too, amplifying the effect of developments in technology. it is inevitable that the decline in customer numbers will be reflected in falling demand, and that falling demand will lead to reduced supply. this applies equally to all forms of service provision, not just banking services. swedbank has released detailed data to explain why they are closing branches, and they show that the branches being closed were used by only 13 % of the clients registered there prior to closure, and that the number of cash transactions in those branches has halved in five years. the larger commercial banks in estonia now provide services more efficiently, and one consequence has been the closure of branches and cash machines in rural areas. a comparison with sweden can be useful here, as that is where the parent banks of our largest banks are based. at the end of 2013 there were 1655 bank branches in sweden, and a little over half of them were cash - free, which is more than twice the proportion in estonia, where only 23 % are cash - free. bis central bankers ’ speeches

banks on reasonable terms. • purchases of assets held by the private sector started and large - scale purchases of sovereign bonds were started in march this year. • it is no secret that i am no supporter of the plan to purchase government bonds. although the first small signs of success are apparent, we must still remain vigilant about the accompanying risks. above all there is the moral hazard that would emerge were some government to lose its appetite for reform. the falls in interest rates provoked by the massive purchases of bonds will lower interest rates temporarily on government borrowing and this must not be used as an argument for pushing vital but painful reforms to some point far off in the future. interest rates are only favourable for a short time and will support governments while they are making bis central bankers ’ speeches changes. if governments were to ignore the budget rules agreed in europe and were to start to increase their debts further, the measures taken by central banks would be of very little help. the other main task occupying central banks alongside monetary policy last year was the launch of single banking supervision. starting supervision and carrying out a thorough and comprehensive assessment of the assets of european banks needed a lot of work from central banks and financial supervision authorities. the successful conclusion of this work let us say with confidence that the biggest and most significant banks in a range of countries in europe are now assessed and supervised on the same terms. in estonia, swedbank and seb pank have come under single supervision. the estonian economy looking more closely at the estonian economy, it can be seen that the growth in estonia in 2014 came primarily from the domestic market. • domestic consumption was lifted by rising employment, falling unemployment, and strong wage growth and a simultaneous fall in prices. the economy grew faster in 2014 than in 2013, but it should be remembered that no return to the growth rates seen in the boom years of the last decade is to be expected. • it may be hard to get used to the idea of lower growth rates, but economic truths cannot be denied. the estonian economy and estonian demographics are in a different phase of development now, and long - term sustainable growth is notably lower at 3 – 4 %. consumer price inflation in estonia fell below zero in june 2014 for the first time since the crisis. four years ago prices fell across a wide range of goods and services, but last year the fall in prices was mainly caused by cheaper energy and food. eesti pank is not forecasting any rise in prices this year, but rising