infrastructure arrangements efficient? 4. are settlement services, however provided, safe and efficient? to answer these questions, we follow the market for retail payments and we try to exchange information and cooperate with other relevant public and private bodies. in the card payment market, issues of competition, pricing and security are of particular importance. i shall comment shortly on the first two of these. even though systemic risks are not an issue in the card market, other risks may be highly relevant. operational risks in particular are important since operational disturbances may give rise to substantial costs for society as a whole. the market for card payments is characterised by the presence of strong network effects in combination with economies of scale. to exploit these effects players that otherwise compete with each other have to cooperate. this cooperation is manifested in common standards and a common infrastructure. it is an important cooperation, which has the potential of providing inexpensive and convenient payments services to the public in a way that would otherwise be impossible. there is, however, another side of the coin. high market concentration may reduce the competitive pressure and thus the functioning of the market. market power may be abused. the effect from concentration on incentives to invest in research and development is ambiguous. high concentration may also make it difficult to establish new payment instruments and systems. it is not obvious that the market by itself can strike the right balance between cooperation and competition. turning to the pricing of card products, the riksbank, in dialogue with the banks, has launched a research project related to retail payments. the aim is to investigate how well the price structure for retail payment services reflects the underlying production costs for these services. when prices for retail services, such as the use of cards or cash, are transparent and reflect the cost of production, they give incentives to efficient use of each instrument. again, if actual costs of cash services were transparent to consumers and if the use of cash was priced according to the cost of providing cash services, the use of cards would probably increase substantially. i am sure that we will move in that direction, even though consumer acceptance of paying for the use of cash will increase only at a slow pace. thank you. number of card payments per capita and year sweden finland norway denmark shares of number of transactions with debit, credit and charge cards 100 % 90 % 80 % charge cards charge cards credit cards credit cards 70 % 60 % 50 % 40 % debit cards debit cards 30 % 20 % 10 % 0 % shares of payment instruments of total number of

stability and price stability are so intertwined that one cannot distinguish between the two. 3 under this view, both standard and non - standard monetary policies are in the first place attempts at stabilizing the financial system, addressing malfunctioning financial markets and smoothing the monetary transmission process. while all these viewpoints recognise the important interplay between financial stability and monetary policy in pursuit of price stability, their relevance ultimately depends on ( i ) the weight to be attached to the “ risk - taking ” channel of monetary policy, ( ii ) the strength of the macroprudential framework and ( iii ) the policy strategy of the monetary authority, especially as regards its policy horizon. the risk - taking channel monetary policy contributes to financial stability by smoothing business cycles and anchoring inflation expectations. monetary policy works through its effects on intertemporal substitution and risk appetite. by lowering risk - free rates, monetary policy increases the attractiveness of investments projects which would not have been profitable under tighter financing conditions. when the central bank wants to exert downward pressure more directly on long - term interest rates, it can absorb duration risk from the market by purchasing securities of relatively longer maturity. this frees up more risk - bearing capacity for investors, which they can redeploy towards bearing different types of risk, including equity and credit risk. in the aftermath of the financial crisis, restoring risk appetite has been a key condition for stimulating economic activity. and as inflation convergence proceeds only slowly, continued monetary stimulus is still needed today. this begs the question whether the persistent monetary accommodation that is needed for inflation convergence could bring about excessive risk - taking and contribute to financial stability risks down the road. risks to financial stability can build up when low interest rates interact with distorted incentives in the financial sector, which arise from information frictions in credit markets and externalities that have not been properly addressed by regulation and supervision. key financial vulnerabilities include excessive dependence on unstable short - term funding, too much leverage, inadequate capital provision for risk exposure and a weak underwriting of loans. macroprudential policy 2 / 5 bis central bankers'speeches the regulatory and supervisory overhaul that took place in the aftermath of the crisis aims to ensure high - level resilience in the financial system, contain the inherent pro - cyclicality within the financial system and take into account systemic negative externalities and system - wide feedback loops. by design, this should limit excessive risk - taking in the financial sector resulting from periods of accommo