and technology of money. milton friedman made use of mill ’ s characterisation of money as a machine when describing ‘ what monetary policy can do ’ in his seminal address to the american economic association in 1967. in 17th century england, goldsmiths would take custody of their customers ’ gold and issue a paper note in receipt. these notes evolved to become payable to “ the bearer ” rather than just the original depositor making it more convenient for people to carry and exchange the paper notes, rather than the underlying gold. realising that it was highly unlikely that all of their customers would want to withdraw all of their gold at any point in time, goldsmiths soon began to issue more notes than the value of the gold in their vaults, by making loans. thus goldsmiths formed the basis of modern banks, and could create money in much the same way as banks do now. all speeches are available online at www. bankofengland. co. uk / speeches we are not, i am pleased to say, seeing today the sorts of issues that arise when the ‘ machine ’ of money, to use mill ’ s words, ‘ gets out of order ’. but we are seeing changes in the technologies that support money in our economy. and given, as i will explain, that the bank of england ’ s role is essentially the stewardship of the money of the uk, that is something we need to understand and to which we need to be ready to respond – calmly and carefully. before discussing some of these changes and the role of the bank, it is worth dwelling a little on what money actually is. this being the ppe society, i am sure you know the standard answer : money, as you learn on an economics course, has to be all of three things : a means of payment – everyone has to be able to buy things with it ; a store of value – everyone has to be able to hold their wealth in it ; and a unit of account – everyone has to use it as a common measure of the economic value of things. this is as good a practical description as you can get, though defining the boundaries is not easy, as monetary statisticians know. it is, essentially, a description of what money does rather than what money actually is. mill and friedman describe money as a machine but perhaps a better description is a technology. but it is not a physical technology – metallic, electronic or otherwise, though its embodiment may take any number of physical forms.

' s " foreign minister ". and time and again, you faced the same challenge. is it better to kick the problem down the road by striking a quick compromise, even if it is bound to come back and haunt you, sooner or later? or is it better to resolve the issue once and for all? you were always passionate about reaching a stability - driven, long - term solution – like during germany ’ s presidency of the g7 in 2015, when you played a pivotal role in ensuring that credible standards for total loss - absorbing capacity ( tlac ) were ultimately in place for systemically important banks. your instinctive ability to read a situation and your negotiating skills were a gift that kept on giving for the bundesbank, including within the eurosystem. when you were the board member responsible for the directorate general statistics, for example, there was the matter of whether the bundesbank would play an active role in running the system in which securities in europe are kept on a security - by - security basis. it was you who convinced the ecb to run the system jointly with the bundesbank, and that was a good outcome. you were also the bundesbank ’ s voice when it came to explaining the particular architecture of the euro area or the bank ’ s viewpoints to the world. and you did this in your speeches, for example, which you held with remarkable frequency. you ’ re a record - breaker, mr dombret, and not just because of all the air miles you have clocked up. our research has found that there wasn ’ t a single central banker in the euro area or the united states who came close to holding as many speeches as you did over the past four years – you could say that ’ s dedication verging on missionary zeal. but there ’ s more. you also made the most of every single trip abroad to engage in dialogue – with colleagues from central banks, with government representatives, diplomats, executives at commercial banks and sometimes students at colleges as well. and what is more, you always kept the door to your network open for your colleagues from the bundesbank so that they could also tap your valuable contacts. for long periods, you managed your directorates general by blackberry – and almost half of our 16 directorates general passed through your responsibility at one point or another during your term of office. this way of working meant that your units had to be meticulous and focus on what really counts :