carl - ludwig thiele : cash payments from the bundesbank ’ s perspective welcome address by mr carl - ludwig thiele, member of the executive board of the deutsche bundesbank, at the esta conference 2015 “ an evolving cash market ”, berlin, 1 june 2015. * * * mr lebeaux dr olschok ladies and gentlemen i am delighted to have been given the opportunity to talk to you at this year ’ s esta conference about the topic of cash and cash payments from the deutsche bundesbank ’ s perspective. but before i move on to that, let me first say a few words on monetary policy and the sovereign debt crisis. 1. monetary policy and sovereign debt crisis as you are all aware, the eurosystem is committed to its objective of ensuring price stability. for some time now, the inflation rate has fallen short of its target of below, but close to, 2 % over the medium term. this is largely due to the sharp decline in oil prices. in march, the inflation rate in the euro area was, at – 0. 1 %, again slightly negative, and in april euro - area inflation stood at 0. 0 %. in order to restore price stability over the medium term, the eurosystem is pursuing a highly expansionary monetary policy, which has led to negative interest on commercial banks ’ credit balances held with central banks. in light of the very low interest rates in the euro area, many consumers are concerned and are asking themselves what this will mean for them. generally speaking, however, households have not yet been affected by negative deposit rates. that is why we have not seen large - scale portfolio shifts into cash holdings as a way of avoiding negative interest rates. however, should banks decide to pass the negative interest rates on to private customers after all, they could react by stepping up their cash holdings. the bundesbank rejects any calls for restrictions on cash holdings, which have been voiced by some in light of this situation. in addition to its interest rate policy, the ecb governing council has decided to increase the expansiveness of monetary policy once again by means of extensive government bond purchases in order to tackle the risks that arise when inflation is too low for too long. the longer the period of extremely low inflation rates continues, the greater the risk of secondround effects – in other words, falling wages – which would then exert further deflationary pressure. and the longer monetary policy continues to miss

aim of the basel system. to conclude, the basel iii document is an important milestone in development of international financial regulation. it has both a regulatory and constitutive dimension : on the one hand, it operates as a further development requiring central banks and other regulators to behave in accordance with its principles in order to strengthen financial stability ; on the other hand it establishes even firmer the basel committee on bank supervision as the pivot of international regulatory cooperation centred on the concept of risk - weight. but basel iii also invites the question of a perhaps different representation of entities taking part in its consultative phases. in this context, it is a logical next step that supervisory colleges encompassing home and host central banks and regulators from this region cooperate in having a greater input in the basel committee ’ s deliberations. not only will this make everyone more aware of the variety of banking practices that exist in this region, but in conferring together at a senior level, during and between college meetings, central bankers and supervisors will secure a reasonable agreement between all parties as the best course on basel iii implementation. the national bank of the republic of macedonia continues to be committed to the adoption of the principles and frameworks contained in the basel guidance papers. in adopting this commitment we take care that implementation is adjusted to our circumstances. in order for individual rules not to harm the bank business in hand specifically, and the economy in general, overall regulation should allow the wise exercise of judgement or discretion by the banks applying it and by the regulator overseeing that application. i wish you, the european banking federation associates ’, a successful meeting today and a pleasant stay in the republic of macedonia. bis central bankers ’ speeches