had. we were touched by a sense of shared loss. as the sadness and mourning began to finally ebb, a breeze of hope started to flow. slowly but surely, optimism towards indonesia ’ s economic revival was planted in the chests of the people. and tonight, i would like to ask you to give a momentary look at what we have achieved in 2005, to review our implemented policies and to draw some lessons that can be learned and implemented for the coming years. subsequently, i would like to convey several steps and thoughts aimed to increase the role of bank indonesia and the banking industry in supporting the nation ’ s economic recovery. we hope this effort is inline with the government ’ s policies towards economic recovery. in the end, we find that we all have a common goal : to reach an indonesian society that is just and prosperous. distinguished guests, ladies and gentlemen : during the first quarter of 2005, optimism ran strong throughout our nation. economic indicators were on track. nevertheless, we knew that our economy, having only just pulled out of crisis, still lacked the resilience to withstand external and internal shocks. excess liquidity, disharmony between strategy and policy implementation, and the lack of economic infrastructure resilience towards external shocks are among the risks potentials our economic stability must face. this vulnerability became apparent in the second semester of 2005. global financial imbalances, increases in world oil prices, and hikes in domestic fuel prices in october were followed by an increase in inflation ( 17. 11 % ) in 2005. the rupiah depreciated by 8. 5 % and the balance of payments showed a deficit of usd 778 million. this contrasts with 2004 ’ s surplus of usd 309 million. the world economic forum stated that indonesia ’ s competitiveness slipped from 69th position in 2004 to 74th in 2005. this position placed indonesia in a rung lower than vietnam. however, despite all the problems, we have to be grateful that our economy was able to maintain a growth of 5. 3 – 5. 6 % in 2005. this growth has helped provide work for only some of those entering the job market and leaving the others adding to the “ openly unemployed ” statistics. distinguished guests, ladies and gentlemen : from the policy making point of view, 2005 is a year full of challenges. the macroeconomic stability faced great challenges. faced with the shocks, bank indonesia issued several policies which included tightening of the economy ’ s liquidity, taking measures to minimize

andrew bailey : the future of money and payments speech by mr andrew bailey, governor of the bank of england, at the group of thirty's 39th annual international banking seminar, washington dc, 26 october 2024. * * * thank you for inviting me to offer some thoughts on what is not a small subject! i think there are two propositions in the world of payments which attract very broad support. one is that in addition to delivering stability there is a strong need to modernise some key payments practices, and thus an opportunity to improve efficiency and reduce cost. this applies to both domestic and cross - border payments, and wholesale ( or high value ) and retail. there is a particularly pressing need in the area of cross - border payments, where progress on modernisation continues to be slow. here more needs to be achieved on speed, cost, transparency and access to cross - border payments. my second proposition is that, in modernising, we should harness the potential of digital technology. to do otherwise would risk a failure of imagination. i don't claim to be in any sense an expert on this point, but harnessing digital technology to improve strikes me as having real potential, say in areas like solving late payment for firms by enabling automatic release of funds when goods are delivered and more widely using encryption technology to prevent fraud. so, i think the case for harnessing digital technology is made. i am going to focus on the implications of doing so from an economic and financial perspective. this strikes me as under - examined. do we need fundamentally to change the money and banking system to enable all of this to happen? my starting point is that as a matter of principle i fail to see why we need to change the system fundamentally, though as a matter of practice there are outcomes under which it may be necessary, but a first best endpoint is that we do not do so. let me add a few points on the nature and role of money. first, payments are, of course, one of the key functions of money – money as a medium of exchange. so, they are core to the interests of central banks. second, we have a world where there are two forms of money – central bank money and commercial bank money. a key feature of the system is that they are fully aligned in nominal and real value terms – i call this the singleness of money. this is achieved by a mixture of central bank operations, bank regulation and deposit protection. with the singleness of