. for example, there is little doubt that expectations in connection with power - intensive industry have already influenced the exchange rate of the krona, which has certainly firmed as a result of decisions on large - scale investment in aluminium production. interest rates definitely affect the exchange rate, but experience in iceland and elsewhere shows that in the long run this impact tends to fade out if monetary policy aims for a rate of inflation close to the prevailing rate among trading partner countries. likewise, the central bank ’ s foreign exchange market intervention tends to have only a short - lived effect. if the exchange rate is moving with a strong momentum in a certain direction, no central bank can resist this for long. this is a common experience of all countries that have liberalised cross - border capital movements, which was also shared by the central bank of iceland when it tried to stem the depreciation of the krona from mid 2000 until autumn 2001. an interesting article on this topic by two central bank employees, gerdur isberg and thorarinn g. petursson, was published in the february 2003 edition of monetary bulletin, which traces the history of central bank interventions in the foreign exchange market over this period and evaluates their impact. the article concludes definitively that at best the intervention had only a short - term effect in each case and the market soon returned to its previous situation. in other words, their conclusion is that intervention on the foreign exchange market against strong prevailing currents has precious little effect. this is in full accord with the experience in other countries. calls for the central bank to set an exchange rate target are therefore unrealistic. the only way to fix the exchange rate while still retaining an independent currency is to return to the old regime and introduce currency controls, but obviously no one wants to return to such an arrangement. exchange rate volatility is best prevented with economic policies which promote economic stability, but this does not only depend on the central bank. it is essential to take a long - term perspective. however, it should be noted that since september last year the central bank has been regularly purchasing currency in the foreign exchange market in order to boost its external reserve. market interventions in 2000 and 2001 depleted the central bank ’ s foreign reserves, creating a pressing need to strengthen it. the central bank has been engaged on this task and will continue to do so. it had purchased foreign currency for the equivalent of 30. 7 b. kr. since september 2002, which has undoubtedly exerted

is because we are still a long way off finding solutions for live systems that are suitable for mass use. blockchain technologies still have many hurdles to jump before they can be applied in real life to alleviate large - scale applications. their biggest problem at present seems to be their all too limited scalability. innovation is the driving factor behind growth. however, the practical application of new innovations must not lead to a trade - off between efficiency and security, both of which need to be safeguarded to maintain the architecture of our financial system in the long term. this applies not just to distributed ledger technology and instant payments but also to other innovative fintech solutions. at this stage in developments it is too early to say much about the implications of blockchain technology. this is partly due to the fact that it is not a simple case of one technology replacing another. what we are dealing with here is a new technology whose actual worth probably lies in its capacity to usher in different processes and structures that are broadly more efficient than those in place today. the task of analysing financial market structures consists in identifying the potential and the risks associated with the various technologies that are being used and understanding their impact on market participants ’ behaviour. in future, ever greater priority will be attached to interconnectedness and appreciation of the “ big picture ” as it affects the individual market participant as a means of gauging developments and 2 / 3 bis central bankers'speeches the risks they entail. on top of this, a solid understanding of market participants as can be garnered from payment and settlement systems, is also useful outside the confines of the actual systems themselves. that is why the direct access to customers afforded by a current account is of such importance to credit institutions. for it allows them to get to know the customer. and the same holds true for central bankers. analyses derived from payment and settlement systems can be of great use in connection with monetary policy, banking supervision and financial stability. the aim of this conference is to bring central bankers and researchers together with a view to discussing changes and challenges in the world of payments deepening our understanding of today ’ s payments landscape forging ahead with innovations in this field. last year, the bundesbank held its first ever academic conference on the topics of payment and securities settlement. that event was a major success. and we hope to expand on that success with this event. in making our invitations this year we teamed up with partners from the united states and we are glad to see