to play an important role in our payment system for the foreseeable future ( even though not 85 million years ) and why cards and other technological developments will not be able to fully take the place of cash. ironically, part of the explanation for this lies in the strong position that debit and credit cards hold on the swedish market. as usual i would like to make clear that my speech is an expression of my own views and that it may not necessarily be shared by my colleagues in the board of the riksbank. cards and cash in sweden cards compete with cash when we pay directly at the point of sale, for example in supermarkets, petrol stations, restaurants or at cinemas. it is the customers who choose how they want to pay, and as we no longer use cheques in sweden the choice is between cards and cash. a high level of card usage thus tends to go hand in hand with a low level of cash usage, and vice versa. in sweden, the use of cards has increased rapidly in recent years. in 2009, the average swede made 182 card payments but less than 30 cash withdrawals. this means that the value of the payments made by card has increased fivefold, and that the number of card payments has increased more than sevenfold, over the last 10 years. unfortunately, there are no corresponding statistics for cash payments, but if we assume that the cash withdrawn bis central bankers ’ speeches from atms is used to make purchases then the value of all the card payments is three times higher than the value of all the over - the - counter cash payments. another way of measuring cash usage is to compare the value of the banknotes and coins in circulation, which is usually referred to as mo, with gdp. if we do this we can see that between 2001 and 2010, mo fell from 3. 8 per cent to 2. 9 per cent of gdp. approximately two - thirds of the payments in the retail sector are made using cards, with some reservation for the fact that it is difficult to measure the number of cash payments in the economy exactly. the situation in denmark and finland is roughly the same as in sweden. in sweden ’ s case this means that we have really caught up since the beginning of the millennium when we used cards only half as much as our nordic neighbours. in a broader international perspective, we use cards to a relatively high extent in sweden. this particular combination of low cash usage and high card usage is unique to a limited number of countries

this first quarter, the risk weighted capital ratio was sustained at 12. 5 %. profitability of the banking industry had also continued for the third consecutive year since the asian crisis. while profits for the calendar year 2001 was affected by the higher level of provisioning during the year, the banking system has recorded a higher profitability of rm 2. 4 billion in the first quarter of 2002. this represented a 72. 3 % increase over the preceding quarter. it reflected the lower loan loss provisions and the lower overhead expenses during the period. of importance is that financing activities during this period was sustained. financing by the banking system increased by 5. 2 % in 2001. consumer credit extended by the banking system rose by 11. 9 % supporting further the strong consumer spending. similarly, loans for the purchase of transport vehicles recorded a strong growth of 27. 4 % while loans for the purchase of residential property expanded by 9. 3 %. there was also strong demand for loans by the retail sector reflecting the positive response to the low interest rate environment and the fiscal stimulus measures to spur the domestic economy. loans disbursed to the manufacturing was also high accounting for 27. 7 % of the total loans disbursed. important aspects of enhanced effectiveness and competitiveness of the banking institutions is whether there is enhanced access, convenience, timeliness, and customised service, and whether the treatment by the banker and the quality and price of the service has improved. the changing nature of the industry has forced banking institutions to augment traditional product offerings with new products and services designed to be more solution oriented. however, in most cases, there are barriers, or reluctance, to phasing out the older products. the result is a widening of the total product array and confusion for customers and amongst employees. competition is forcing many banks to take a defensive posture. in many instances, the banking institutions do not have the financial information systems capable of measuring the true profitability of individual products and services. there needs to be an ability to monitor and identify the products and customer relationships that may make a questionable, or even negative, and those that contribute to earnings. as customers become increasingly aware of alternative solutions, institutions will understandably feel compelled to fill gaps in their offerings to maintain relationships. the critical success factor will be to ensure that this is done at a profitable pricing point - and that the addition of new products does not decrease the profit contribution of existing products and services. for these reasons, it will become increasingly important