klaas knot : on payment trends - opportunities and risks speech by mr klaas knot, president of the netherlands bank, at the 13th conference on payments and market infrastructure, jointly organised by the national bank of north macedonia and the netherlands bank, ohrid ( digitally ), 9 december 2021. * * * good morning everyone. it is a pleasure to be here at this conference, jointly organised by the national bank of north macedonia and de nederlandsche bank. i am glad to see that, after a one year hiatus, this thirteenth conference gets to take place again – even though only virtually. before continuing, i would like to express my shock and sadness at the terrible bus accident that happened two weeks ago – two days before we were originally going to meet. my deepest condolences to the people who have lost family members and beloved ones. coming back to this conference – today and tomorrow, you will be discussing payments in the digital era, with an inside out perspective. and that perspective is, truly, the perspective of a modern central banker. a central banker who keeps his finger on the pulse of what happens in our society. a central banker who is aware of recent payment trends. a central banker who looks at what is happening nationally, but also globally. trends regarding, for instance, the use of cash. in the netherlands, the use of cash has declined steadily. ten years ago, about 60 percent of all shopping was paid for in cash. before the pandemic, that number had already dropped to 32 percent. today, the number of retail cash payments has declined even further – to a little over 20 percent. like in many countries across the world, also in the netherlands and in north macedonia we see an ongoing digitalisation of our societies and payment structures. this global trend has created a lot of opportunities for organisations and their customers. unfortunately, it has also, among other things, contributed to an increase in cybercrime. both financial institutions, like banks, and their customers are being targeted by criminals. a compelling example is the rise in ransomware attacks over the last couple of years. another trend today, is the development of cryptos. cryptos are issued independently of commercial or central banks, but there are increasing links between cryptos and the mainstream financial system. a serious drawback is the fact that the value of most cryptos is very volatile. this makes them unsuitable as a means of payment, store of value and unit of account. and the accessibility

hypothesis, prices in ﬁnancial markets should reﬂect all available information. so it could also be the case that investors are lacking important information. while advances have been made in the disclosure of greenhouse gas emissions by a number of companies, especially large ones, ﬁnancial markets are still lacking timely information on the carbon footprint of many issuers of securities. [ 9 ] academic evidence suggests that disclosure of corporate greenhouse gas emissions reduces investor uncertainty, which is rewarded in the form of a lower cost of capital. [ 10 ] this underscores how transparency is key for ﬁnancial markets to fulﬁl their role and channel funds towards climate - friendly investments. the ﬁnancial sector is also where central banks come into play. 3 the role of the central bank https : / / www. bundesbank. de / en / press / speeches / combating - climate - change - what - central - banks - can - and - cannot - do - 851528 3 / 8 20 / 11 / 2020 combating climate change – what central banks can and cannot do | deutsche bundesbank i believe that every one of us should be doing more about climate change. clearly, it is also up to central banks to do their part. and this certainly goes beyond reducing their carbon footprint as institutions. climate change, and action to mitigate it, affect central banks in several ﬁelds. [ 11 ] above all, our task of maintaining price stability could become more challenging. both climate change and climate policies can have an impact on key macroeconomic variables such as prices, interest rates, output, and employment. [ 12 ] it is of vital importance for central banks to gain a full understanding of such effects and their implications for monetary policy. therefore, we need to embed climate - related risks and developments in our monetary policy analyses and update our analytical and forecasting toolkits accordingly. moreover, climate change, and action to mitigate it, can give rise to ﬁnancial risks that could affect not just individual banks or investors but the entire ﬁnancial system. in our role as prudential supervisors and guardians of ﬁnancial stability, we have to ensure that credit institutions adequately incorporate ﬁnancial risk into their risk management, including those ﬁnancial risks that are climaterelated. yet, central banks also have to practise what they preach. we owe it to european taxpayers to keep the ﬁnancial risks that arise from our monetary policy operations in