4. 3 ) ( 2. 0 ) ( 1. 8 ) ( 6. 4 ) ( 8. 4 ) 10. 9 502. 5 113. 4 162. 5 103. 0 sources : accountant general and central bank of barbados p : provisional table10 : summary accounts of the banking system ( $ million ) 2009p net international reserves 1, 607. 7 1, 691. 2 2, 247. 7 1, 749. 4 1, 929. 3 monetary authorities 1, 235. 7 1, 194. 1 1, 548. 0 1, 356. 9 1, 503. 0 commercial banks net domestic assets credit to public sector 371. 9 497. 1 699. 7 392. 5 426. 3 3, 587. 3 4, 085. 9 4, 340. 7 5, 006. 4 5, 112. 7 380. 8 337. 1 452. 1 central government ( net ) 650. 5 433. 1 533. 6 732. 8 805. 0 other public sector - 269. 7 - 95. 9 - 81. 5 - 216. 0 - 208. 2 credit to rest of financial system 312. 9 343. 2 482. 1 477. 9 659. 3 liabilities to other financial institutions - 516. 2 - 631. 9 - 925. 4 - 808. 8 - 692. 2 credit to non - financial private sector 3, 791. 8 4, 292. 9 4, 513. 5 5, 010. 9 5, 070. 2 liabilities to the non - financial private sector 5, 195. 0 5, 777. 1 6, 588. 3 6, 755. 8 6, 876. 1 1, 563. 3 1, 794. 7 2, 004. 8 1, 978. 1 1, 892. 9 demand deposits time deposits savings deposits currency in circulation 491. 1 590. 4 2, 692. 1 2, 964. 7 3, 327. 6 3, 584. 2 3, 900. 1 465. 0 763. 9 590. 7 713. 5 448. 6 552. 7 516. 9 492. 1 479. 9 492. 7 source : the central bank of barbados p : provisional

could be described as idle inventory stock, but these are defined as notes in circulation. but i should be clear that i don ’ t have enough evidence to prove to you that the stock : output ratio for banknotes has gone up, which would run counter to the story in almost all other industries. i want to move on now to trends in cash usage ( i am using “ cash ” here to mean banknotes and coin ). chart 8 shows survey evidence for the use of cash in retail transactions in the uk over the last 25 years. in terms of the share of the total volume of transactions, cash has fallen from over 80 % in the mid 1980s to 60 % currently. in value terms, cash accounted for around 9 % of all retail transactions in the early 1990s, whereas it is around 4 % currently. cash is generally used for small - value transactions. the latest evidence suggests that the average value of a cash transaction is around £9, with 93 % of payments under £5 being made in cash. one in five adults in the uk report that they use only cash for day - to - day transactions, with this group heavily focused on teenagers / young adults and the elderly. the survey evidence also indicates that more credit - constrained individuals prefer to use cash, as a budgeting tool based, i think, on the principle that with cash you can only spend what you have. the paradox of banknotes this quick survey of trends in banknote demand and use leaves us with what i regard as the paradox of banknotes. the total value of bank of england banknotes in circulation continues to rise, but their use in transactions is falling gradually. to recap, i have put forward some arguments that seek to explain this paradox. from a macroeconomic perspective, sustained low inflation has increased confidence in the real value of the currency, while more recently demand for banknotes has risen during this recession, and particularly for high denomination notes, reflecting loss of confidence in banks, and very low interest rates. atms have changed banknote issuance. and, banknote use is more concentrated among the young, the elderly, and those on low incomes. i would add one other thought on the demand for banknotes, which is more to do with human psychology. i suspect most people, however much they use cards, feel a degree of comfort from knowing that they also have cash in their wallet or purse, even if it is as a back - up. what does this analysis tell us about future