chance to see and handle prototype notes. after that public consultation, we ’ re confident that the switch to polymer will have broad public support. for those who might be concerned about the change, let me reassure you that the new polymer notes will retain the familiar look of bank of england banknotes, including of course the portrait of her majesty the queen, as well as depictions of historical characters of national significance. that continuity of design helps explain why people who have had a chance to handle specimen notes were even more likely to view polymer favourably. the depiction of historical characters will remain an integral feature of our banknotes, providing an opportunity to celebrate individuals that have shaped the united kingdom. in bis central bankers ’ speeches order to ensure public confidence in banknotes, it is essential that the choice of characters commands broad public respect and legitimacy. that is why in july, at the same time as announcing that jane austen would feature on the new £10 note, i promised that we would review the way in which the characters featured on banknotes are selected. today we are announcing a new set of principles to guide the choice of characters and a new process to ensure that those principles are, and are seen to be, followed. the new principles for character selection state clearly and positively the bank ’ s aims in using historic characters on our notes. they put diversity and inclusivity at the heart of the selection criteria. and they make clear our intention to portray a diverse range of characters over time, with each new decision taking into account previous choices. the new process will be open, transparent and inclusive. there will be greater input from the public and from external experts in the form of a new advisory committee with a majority of independent members. that body will recommend a broad theme – for example scientific achievement – before the public are invited to nominate characters within that theme. the advisory committee, with input from public focus groups, will narrow down the field to a final shortlist of characters and the governor will make the final choice from that shortlist. these changes will ensure that the characters on our banknotes are fully representative of the history and diversity of this great nation, while having the necessary public respect and legitimacy. our polymer notes will combine the best of progress and tradition. they will be more secure from counterfeiting and more resistant to damage while celebrating the history and tradition that is important both to the bank and the nation as a whole. by consulting widely on the switch to polymer, and by putting in place a new

the question of whether the legal tender status of a banknote is undermined if limits on cash payments make it impossible to use a certain denomination in transactions14. this would be tantamount to abolishing that denomination. but only the governing council of the ecb can make such decisions about the denominations of euro banknotes, and that includes the decision on whether to discontinue certain denominations. so there must be scope for all denominations of the legal tender to be used, otherwise this competence of the governing council would be undermined. 3 / 5 bis central bankers'speeches general, non - sector - specific limits on cash which largely preclude the use of a denomination are therefore likely to be very difficult to justify. in this context, i would like to comment on our decision on the €500 banknote. we have decided not to issue a €500 banknote in the second series of euro banknotes. however, €500 banknotes from the first series – which some europeans probably have under their mattresses – retain their status as legal tender. so people need not worry that their €500 banknotes will lose their value and can continue to use them as a means of payment. ultimately, the treaty includes a limit to limits on cash by assigning legal tender status to the euro banknote denominations as determined by the governing council of the ecb. we at the ecb monitor compliance with this provision. we would also intervene – but fortunately have not yet had to – if there were cases of discrimination against cash as legal tender compared with alternative private payment methods. this could happen, for example, if a payment fee were to be levied. you will recall that a core feature of legal tender is that banknotes must be accepted at their face value. anyone who has paid by card when booking a flight is aware of the difference. in the case of card payments, additional payment fees are allowed and are standard practice. conclusion : what are the implications for our activities within the eurosystem? i will conclude by saying that printed euro banknotes will retain their place and their role in society as legal tender for a very long time to come. there is no viable alternative to euro cash. there is good reason to believe that banknotes don ’ t only have to take the form of printed paper, cotton or polymer. however, printed banknotes will remain our core business. and if there is public demand for digital central bank money, this should only be a technical variant of