yves mersch : digital transformation of the retail payments ecosystem introductory speech by mr yves mersch, member of the executive board of the european central bank, at the joint ecb and bank of italy conference, rome, 30 november 2017. * * * efficient and safe retail payments systems are a precondition for the functioning of any modern economy. they allow for everyday transactions to take place, thus providing the foundation for commerce and trade. central banks through cash and banks have traditionally offered these services. and they were successful in creating a secure and trusted payment ecosystem for consumers. however over time the banking ecosystem has developed inefficiencies. it has lost some ability to innovate and adapt to the changing needs of the end - user. in europe technological disruptions, competition from non - banks and regulatory pressure has forced banks to re - examine how they provide retail payment services. the ability to provide real - time services will be essential if banks want to retain and gain customers. the strategic importance of instant payments cannot be overstated. the move towards a real - time world with the provision of real - time services cannot happen without pan - european instant payments. they will provide a new framework for innovative and efficient retail payments in europe. my talk today will focus on instant payments but i will also briefly discuss the alleged innovation brought by private virtual currency schemes without an identifiable issuer. the foundations of instant payments and ensuring stakeholder involvement the single euro payments area ( sepa ) was the origin of today ’ s digital landscape for retail payments in europe. it is a key ingredient of europe ’ s single currency and was necessary to bring the full benefits of the euro closer to all citizens. this integration of electronic retail payments in europe was full of challenges and was only completed 12 years after the introduction of euro notes and coins. one of the most prominent issues that faced sepa was the lack of full stakeholder involvement. initially, sepa was considered an “ it ” project to be implemented by banks. it was not seen in the overall context of a project that could transform payments in europe. the project did not engage enough with europe ’ s consumers and businesses. support from all stakeholders is thus crucial to the success of any such undertaking. to facilitate such support, the ecb established the euro retail payments board ( erpb ). the erpb brings together both sides of the market, the supply and the demand side, the banks and the end users in order to further the development of

the only g201 country that does not have an explicit deposit insurance scheme. in fact, about 125 countries have an explicit deposit insurance scheme, of which the federal deposit insurance corporation in the us2 is probably the best known, having been established in the 1930s just after the great depression. the organisation, funding, and operations of deposit insurance schemes varies greatly between countries ; while there are a number of generic characteristics, each jurisdiction 1 group of twenty 2 united states page 3 of 6 ultimately decides on the type and structure of the deposit insurance scheme that best suits its own financial system. however, a common denominator of all deposit insurance schemes is that they play an important role in the resolution of failed banks and the prevention of financial crises emanating from institutional failures. they also facilitate the process through which poorly managed and weak banks can leave the system in an orderly way, without causing extreme hardship, thereby making way for efficiently managed firms that can better serve the needs of the economy and of the population. the purpose of today ’ s workshop is to discuss the proposals outlined in the discussion paper that was published on 30 may 2017, which contains the joint views of the sarb and national treasury on the design features of a possible deposit insurance scheme for south africa. the paper deals in detail with all the aspects of the envisaged deposit insurance scheme ; these will also be covered in subsequent presentations today, which i do not want to front - run or repeat. let me just highlight, briefly, the key features of the envisaged scheme. firstly, the deposit insurance scheme would be housed in a separate legal entity established as a subsidiary of the sarb. this organisational structure would ensure adequate independence for the deposit insurance scheme to pursue its objectives, but with the backing of the sarb for good governance and operational support. secondly, all deposits ( except those by other financial institutions and government, listed in the paper ) would be covered, irrespective of the type or term of the deposits. deposits at all banks, small and medium and large, would be covered to the same limit of r100 000. based on a survey of the deposits at all banks, we estimate that r100 000 would be sufficient to fully cover the deposits of about 98 % of the retail depositors in south africa. among the other benefits that have been mentioned, we expect that this level of coverage would help the small banks to expand their funding base and, over time, contribute to the diversification of the