michel camdessus central banking lecture – washington, 14 september 2022 ethics of currency : a possible guide for central bankers? speech by francois villeroy de galhau, governor of the banque de france press contact : mark deen ( mark. deen @ banque - france. fr ), deborah guedj ( deborah. guedj @ banquefrance. fr ) page 1 sur 10 ladies and gentlemen, it is my great pleasure to be in washington with you today, and to deliver this speech in honour of michel camdessus. i would like to take this opportunity to pay a special tribute to him, and express my personal gratitude. michel is not only one of my predecessors as a governor of the banque de france, but also a friend of mine and – yes – a master. my speech was prepared with his precious help, so today you can almost enjoy a “ camdessus lecture by michel camdessus himself ”. the theme we chose together, the “ ethics of currency ”, has guided him throughout his career. in the murky waters that we central bankers are navigating, it should more than ever serve as a golden thread. i will briefly discuss the reasons why i dare to talk about the ethics of currency ( i ), then elaborate on the golden triangle of trust today ( ii ) and finally raise the question as to whether the international dimension of trust can still inspire us ( iii ). i. why i dare to talk about the ethics of currency before going any further, we must find a common definition of “ ethics ”. is it possible to take this word as a synonym for “ morality ”? for centuries, this question has been the “ bridge of donkeys ” ( pons asinorum ) for philosophers ’ apprentices. supporters of the synonym theory highlight a common etymology between the two words – morality is the latin translation of greek ethos. despite their initially identical meanings, the two words nevertheless have followed different paths over time : “ morality ” can be described as a “ hard concept ”, similar to the fundamental rules engraved on moses ’ stone tablets or in the code of hammurabi. in contrast, “ ethics ” refer to a softer and less binding concept, a kind of existential version of morality with a more personal dimension. i will use the word ethics in that way in this speech. the question of interest rates is a noteworthy example of the way a moral prohibition can evolve into a more flexible

commercial risk tolerance may differ from social risk tolerance. in the seventh sepa progress report we dedicated a chapter to the topic of security. by sending a number of ambitious messages we have ensured that the necessary attention will be paid to this topic. one of these messages was our expectation that the cards industry in europe will issue “ chip - only ” cards from 2012. but if the industry decides to retain the magnetic stripe on cards for practical reasons, we would ask that any data enabling the processing of magnetic stripe transactions should be removed. this should ensure that sensitive account information can no longer be copied. the current levels of fraud clearly show that something needs to be done urgently in this respect. the increasing level of card - not - present fraud carried out over the internet can be addressed by the introduction of secure payment protocols ( e. g. 3d secure or virtual cards ). to encourage the use of such security measures, a liability shift – which has been used, for example, as an incentive for emv migration – could be applied. clearly, sepa requires a harmonised minimum level of security for retail payments to ensure transparency and a level playing field. in order to achieve this, we need to have more clarity about the security requirements as well as about the actors involved in setting these requirements. we have recently launched the idea to set up a forum for security issues and have received a positive feedback from banks. such a forum would monitor market developments. in addition it could enable the relevant authorities, including banking supervisors and central banks, to align their expectations on security. the eurosystem is currently investigating what could be the precise mandate and composition of such a forum. conclusion i have to admit that these five new year ’ s resolutions are quite demanding. but i believe they are essential for the sepa project. if all of us continue to work on sepa with the same level of dedication as this year, we can accomplish all of them.