i. e. bbb – / baa3 ) beyond the end of 2010, except in the case of asset - backed securities ( abss ). in addition, the governing council has decided to apply, as of 1 january 2011, a schedule of graduated valuation haircuts to the assets rated in the bbb + to bbb – range ( or equivalent ). this graduated haircut schedule will replace the uniform haircut add - on of 5 % that is currently applied to these assets. the detailed haircut schedule will be based on a number of parameters which are specified in the press release to be published after today ’ s press conference. we are now at your disposal for questions.

end the most interesting question may be why the ach has not displaced the costlier check system even more rapidly. electronic money with that background, we now turn to our main topic, electronic money. this term is normally taken to refer to a stored - value product, where a prepaid balance of funds is recorded on a card or personal computer controlled by the consumer and updated automatically as payments are made in or out. the stored - value balance would be recorded as a liability of the institution, financial or otherwise, that issues the card. early stored - value cards recorded the account balance on magnetic strip, but magnetic strip cards can be difficult to reload and are easy to tamper with. future smart cards are likely to record stored - value through an embedded microprocessor chip which permits sophisticated encryption to protect against counterfeiting. these cards can also be used as credit cards, debit cards or repositories of other identifying information for the consumer. while much rarer, electronic money systems can also be computer - based. under these systems, variously called e - cash, cyber coins and cyberbucks, computer software generates electronic ( virtual ) tokens that serve as cash. the seller has to verify the tokens and the issuer may have to settle them – operations that at this point have proven costly and difficult. stored - value products can be used in open or closed systems. closed systems involve a narrowly defined group of consumers such as riders of a metropolitan transportation system or students at the university of michigan. the infrastructure necessary to redeem the value is in place either at transportation system terminals or owned by merchants within a relatively small geographic area. open systems involve many consumers and merchants over an extended geographic area, with the stored - value cards really functioning as electronic money. one way to assess the potential of electronic money is to analyze the benefits and costs of electronic money as compared with alternative ways of making payments. i will discuss this separately for consumers, merchants, financial institutions and the federal reserve system. while the potential gains to all groups together may not be huge, they do seem to be positive, adding to the puzzle about the slowness of adoption of stored - value technology. from the consumer ’ s standpoint, there could be many potential advantages of electronic money, but there are also risks. stored - value cards are easier to handle than either cash or checks. although most electronic money systems now do not have pin number protection, that protection is technologically possible, and