benoit cœure : retail payments at a crossroads speech by mr benoit cœure, member of the executive board of the european central bank, at a joint conference by the european central bank and the bank of france “ retail payments at a crossroads – economics, strategies and future policies ”, paris, 21 october 2013. * * * i wish to thank monika hempel for her contributions to these remarks. i remain solely responsible for the opinions contained herein. ladies and gentlemen, it is a great pleasure for me to make some introductory remarks at this conference on the different roads that may lie ahead for retail payments. but first of all, i would like to thank the banque de france for organising this conference jointly with the ecb, and for hosting it. i am also grateful to christian noyer for opening this event. i am sure we will spend two fruitful days having some valuable discussions and exchanges on the economics, strategies and policies of retail payments. four years ago, in 2009, the ecb and the de nederlandsche bank organised the first conference of this kind. 1 the idea behind the conference was to foster the dialogue between academics and policy - makers in the field of retail payments. the second conference was organised with the oesterreichische nationalbank in 2011. 2 and this is the third conference in the series. it shows that we are committed to build on the progress achieved and keep the dialogue going. before the crisis, the retail payments business went largely unnoticed as a substantial source of revenue in banking. during the crisis, as was outlined in the 2009 conference, the retail payments business had been resilient, providing reliable and regular revenues. as a result, the subsequent realisation that banks with more stable funding models were better able to cope with the crisis has led in recent years to a greater recognition of the importance of retail banking and retail payments. indeed, one of the conclusions drawn at the 2011 conference was that retail payments have also become more socially relevant. businesses and individuals must have cheap and easy access to basic retail payment services in order to pursue their economic activities. the further development of retail payments is a key factor in financial inclusion. i will come back to this issue later today in my panel discussion. that said, the social costs of retail payment instruments, including cash and non - cash payments, remain substantial, as a recent ecb study has shown. those costs amount to almost 1 % of gdp in europe, with considerable differences from country to

have indeed given rise to the recent moderation in prices and, if so, whether they are likely to continue to perform this stabilising role in the future. the current surge in commodity prices, including food more recently, which is resulting, in particular, from supply being unable to match higher demand from emerging markets, reminds us that globalisation can also lead to upside risks to world inflation. furthermore, global events could become so important in driving inflation that they affect the conduct of monetary policy. for instance, it could be that the traditional links between inflation and “ domestic ” variables – particularly the level of unemployment – have become obsolete in a world where emerging asia as well as previous communist countries provide such a large amount of labour at low cost. although it remains difficult to reach firm conclusions on the overall effects of globalisation, the most recent developments in manufacturing import prices suggest that globalisation continues to have a dampening effect on inflation of manufactured goods prices. first, extraeuro area manufacturing import price inflation originating from “ low - cost ” countries remains lower than average import price inflation from other euro area trade partners. second, with price levels of imports from low - cost countries remaining substantially lower than those of imports from high - cost countries, the size and persistence of the dampening effect on euro area import prices depends predominantly on the “ share effect ”. although there are some signs that this effect is weakening, the share of imports from low - cost countries in the euro area has continued to increase. a number of other challenges can be mentioned. globalisation is associated with possibly epochal changes of demand and supply, the structural part of which is difficult to assess. the progressive completion of global financial integration has created a set of sophisticated networks that link the fortunes of markets, asset classes and financial institutions around the world. we, in the eurosystem, are very closely monitoring the ongoing significant market correction we have experienced since the middle of last year, taking into account all their possible consequences including on inflation. over time, globalisation may have complex indirect effects on inflation beyond the more traditional links i have just mentioned. i look forward to listening to your views about all of these issues.