severely affected jobs are typically those requiring the least education, our efforts must be directed to improve education and to offer training for those affected. i am often asked whether dutch wages are too high in the face of competition from low - wage countries. i believe that the gap in wages will fall, but there are two sides to that issues : ( 1 ) what will happen in china, and ( 2 ) what will happen in europe. a consequence of china ’ s rapid productivity growth will be that real wages in china will rise. economic history offers no example of a country that experienced long - term productivity growth without a roughly equal rise in real wages. the idea that somehow the old rules no longer apply and that china will always pay low wages, despite rising productivity, has no basis in actual experience. the second issue is what will happen in europe. here my approach is a pragmatic one : we should not a priori exclude the possibility that part of the adjustment could occur via wages. i would like to remind you that we are dealing with a world labour - supply shock of unprecedented magnitude. we simply do not know what the exact effects on european wages will be, but one thing is clear : if real adjustment is needed, we cannot prevent it from happening. the more restrictions we impose on the adjustment process the worse off europe will be in the end. restricting wage adjustment could result in adjustment occurring via a lower exchange rate. but with one important downside : wage adjustment can allow for sectoral differences, while adjustment via the exchange rate hits the entire economy. this is most likely not an optimal solution. conclusion the world economy is increasingly integrated. therefore, china ’ s rise transmits shock waves to western economies as that country continues to develop and prosper. europe will face tough competition. new possibilities will open up for european firms, but europe ’ s production of labourintensive goods is likely to come under pressure. china offers tremendous opportunities for western consumers and firms, and there is little reason to be scared of china ’ s rapid development. to fully reap the benefits of china ’ s rise, european policymakers must not hesitate to reform our economies. in particular, our labour markets need to become more flexible, as the pace of change is likely to increase. changes imply that in the short run, there will be winners and losers. overall, however, welfare will rise, as was the case when we moved from the horse to the car. changes in the european production structure towards

cecilia skingsley : are non - banks reshaping the retail payments market? speech by ms cecilia skingsley, deputy governor of the sveriges riksbank, at the conference “ non - banks in payment market : challenges and opportunities ”, organised by the bank of lithuania and the sveriges riksbank, vilnius, 8 october 2015. * * * the retail payments market is undergoing a structural change, potentially unparalleled with anything we have seen in a long time. this gives rise to a number of important questions as regards competition and cooperation, regulation and where this development may take us in the long run. an interesting and important market the retail payments market is an interesting and important market. important because it underpins the modern economy. if we were unable to pay in a safe and efficient way, the economy would soon grind to a halt when markets for goods and services stopped functioning. interesting because of its rapid development. it is here the action is. on a global level, the payments market has grown by some 8 per cent a year for a decade. growth has been higher not only in the developing world, reflecting overall higher economic growth rates, but also in europe and north america, where it has been some four per cent annually. given the financial crisis and the relatively low economic growth, this is a healthy growth rate. on a global level, estimates indicates that the retail payments market is worth several hundred us billions in revenue from transactions. if we add account - related revenues and interest rate and penalty fees from credit cards, the figures increase further. with this growth rate and potential revenue, it is no wonder that the retail payments market attracts so much attention. there are other factors that help explain why so much has happened over the last few years and that continue to drive the development. the rapid techno - logical development of smartphones, tablets, and high - speed internet connection is one of the most important factors. today, approximately half of all adults in the world have a smartphone and this share is likely to increase significantly. some 40 percent of the global population use internet. this technology is widespread and accessible at a reasonable cost and it has changed the way we shop. we purchase goods and services in new ways and because of this we also demand payment services that are suited to this new type of interaction. e - commerce is the prime example. this year some 38 billion e - commerce transactions will take place. we interact with e - merchants who we have no