central bankers ’ speeches – and numerous other measures were implemented to guarantee that debit card payments go through without fail, and – the introduction of the connect reporting system has improved communications and guidance among banks, providers, and retailers when payment systems fail. in addition to this, the forum is working hard on initiatives to reduce the dependencies between online banking, mobile banking and ideal. this will definitely be discussed at the foundation ’ s autumn meeting. pin agreement 2014 prelude to european efficiency and innovation with the introduction of iban, european payment transfers and european direct debits, the migration to the single euro payments area was successfully completed on 1 august 2014. in 2012, sepa had already been brought closer when the magnetic strip on bank cards was replaced by the emv chip. you all made an impressive contribution to the successful migration to sepa, which warrants a well - deserved compliment from de nederlandsche bank. but sepa is only the start of efficiency in payments transfers. we are on the brink of a new payments world in which businesses, retailers and consumers will be able to reap the benefits of the european market even more. road clear for innvations the 2014 pin agreement has provided an excellent stimulus by explicitly promoting innovation. it builds on the rapid technological innovations and the quickly changing consumer preferences and market conditions. to my mind, the dutch agreement is an example that the netherlands can convey to the single european payments market. this will not be done overnight. changes to the large european market require great commitment from market participants. to streamline these changes, the euro retail payments board, the erpb was launched last may with a view to sepa. this new european payments governance body may grow into a european version of the forum on the payment system with users and suppliers working together on the further development of sepa. the erpb therefore definitely deserves the chance to prove itself in the years ahead. contactless paying may be generally adopted a few years from now currently half of all bank cards and over one tenth of the 280, 000 payment terminals have been equipped for contactless payment. the latest generation of smartphones can also be used for contactless payments. particularly for payments up to eur 25 – the most frequent ones – this saves a lot of time, as they take nine seconds as opposed to 20 seconds for contact payments. if we assume that some two billion debit card payment up to eur 25 will be made by 2018, this means that a total of

. i wonder how han reflects on this quote today, looking at the current calibration of monetary policy on both sides of the atlantic. whereas by now the fed has unwound the bulk of its qe - portfolio, the ecb restarted net purchases under its qe - program as recently as in september. but today, i will not dwell on the merits of the policy package that was adopted in september and has been discussed extensively afterwards. instead, i will focus on longer - term challenges for monetary policy. in my view, these challenges constitute a point of departure for the review of the ecb ’ s strategy that is anticipated to start formally in the new year. earlier this week, han remarked in the dutch newspaper het financieele dagblad that a new captain is in charge of developing a new strategy for his team. 1 well, this is also the case for the ecb. i will focus on three challenges affecting central banks worldwide. i will also discuss two challenges related to the specific context in which the ecb operates. i will argue that these challenges warrant a discussion in the upcoming review of the monetary policy strategy on the merits of increased flexibility with respect to our inflation aim. three challenges for central banks worldwide let me start by outlining three challenges that are not unique to the ecb, but apply more broadly to central banks worldwide. the first challenge, of course, is the fact that in the current environment, inflation is persistently low, and no one knows exactly why … different possible explanations for this phenomenon have been put forward, of which i would like to mention four : 1. we now see a weaker relationship between real economic activity and inflation than in the past. 2. inflation may be subject to more negative shocks than in the past. 3. inflation expectations are increasingly backward - looking. 4. and, finally, inflation may be subject to a declining trend in some of its underlying components. this explanation has been confirmed by recent dnb research. 2 to be more precise, i am not talking here about a secular declining trend that will inherently go on forever. some of the underlying drivers of this trend, like globalization or ageing, might fade away or reverse, as was also stipulated by carl tannenbaum. the process of globalization of the past decades for example might reverse due to an ongoing escalation in protectionism. the various explanations for persistently low inflation are interrelated and may to some extent co - exist. in terms