: according to the european commission ’ s cyber security report 2012, one out of every three european citizens had concerns about making payments online. but the situation was not as serious in all countries. a number of european countries had introduced minimum requirements for online payments, some as part of their oversight function and others as supervisors. yet, these requirements were not harmonised and we needed to raise the bar for everyone. at the same time, as some of you might remember, some banks complained to the ecb that some countries were imposing stricter security requirements than others. bis central bankers ’ speeches for these reasons, we took the initiative to invite all supervisors and overseers within the european union and the european economic area to form the european forum on the security of retail payments. this forum united the interests of two different parties : the interest of public authorities in the safety of payment services and the market ’ s interest in homogenous requirements that allow for a level playing field. secure pay was a big step forward and is also an excellent example of european cooperation. it is a place where authorities can share their insights and discuss policies as well as the latest market developments. more importantly, we learn from each other and can agree on common minimum requirements. thus, instead of leaving things in a grey area or duplicating efforts, the members of the forum cooperate and optimise their resources. until today, the forum has focused its efforts on new technologies and emerging risks, such as internet and mobile payments and third party access to payment accounts. the philosophy behind secure pay has been to try to develop generic requirements that can accommodate market developments and changes in technology. it also takes a risk - based approach. for example, exemptions from the requirement of strong customer authentication measures can be made provided that the payment service provider carries out a sound analysis of the risk involved in a particular transaction. overall, the main changes brought about by the work of the forum are that the industry will be obliged to have sound risk management, thoroughly identify and authenticate the customer and the transactions he / she wishes to make, protect sensitive payment information, upgrade their fraud monitoring tools and prevent fraud by educating the customer. i believe that these measures are necessary and effective. they are also in line with market needs. i would also like to point out that secure pay has provided substantial input for revising the payment services directive. therefore, i think that as an initiative based on voluntary cooperation the forum has been very successful and productive. in order

##3a. pdf. bis central bankers ’ speeches reputational problems in the asset management arm could spill over to the parent company, or vice versa. new macroprudential tools, be they leverage limits, guided stress tests, or redemption gates, would need to be placed in the hands of the regulators to be effectively deployed. and just as for the banking sector, to be successful in countering the build - up of systemic risks over the cycle they would need to be applied in a time - varying fashion. however, it is important to stress that, when determining the appropriate policy responses to mitigate growing risks in the sector, consideration should be given to its growing role in credit intermediation. we need to ensure that the impact on supply of credit to the real economy is limited. there is of course much we still have to learn about the design and implementation of such instruments ; indeed, we are still only beginning to discover the mechanisms through which macroprudential policy works in the banking sector. still, i am convinced that these additional instruments are essential – and starting work on them is urgent – if we are to have a holistic view on systemic risk and financial stability. conclusion let me conclude. what i have argued today is that we are entering into an environment where monetary policy cannot be responsible for managing the financial cycle. and this fact, while acknowledged in principle, has not yet been fully reflected in our policy frameworks in practice. a comprehensive approach to macroprudential policy means two things. first, making efficient use of macroprudential tools that can constrain excessive credit growth towards the real estate sector, which is the main driver of the financial cycle. borrower - based measures therefore come to the forefront. given their importance, they deserve to be properly embedded in european legislation and effectively coordinated within european institutions. second, broadening the coverage of the macroprudential toolkit to reflect changing patterns of intermediation – i. e. to the shadow banking sector. it may be the case, as jeremy stein famously argued, that monetary policy is the best tool to “ get in all the cracks ” of the financial system. but as that option may not be available to us for some time, it is incumbent on policymakers to put more attention into developing instruments that can reach into all the corners of the financial system. i trust that our conference today will provide many useful insights on how we can proceed with this agenda. bis central bankers ’ speeches