rate will pass through to banks ’ lending and deposit rates. norges bank closely monitors developments in the banking industry and the financial system. innovation and competition can bring better and cheaper services, but can also bring risks associated with, for example, cybercrime, data protection and financial stability. there is also the risk that some participants gain substantial market power. important work is underway at an international level to adapt regulation, supervision and oversight to the new landscape. norges bank supports this work. two of the main considerations are that society as a whole must reap the benefits of the new solutions, while the associated risks must be contained. we also want to be a driver behind changes that enhance the efficiency and safety of the payment system. an example is the work on developing real - time payment solutions, which today allow payments to be sent within seconds to the payee ’ s account. we are also considering whether norges bank should take on a more operational role in the real - time payment infrastructure. in our work, we have to take a precautionary approach and keep a close eye on the potentially far - reaching implications for the financial system of some of the changes underway. we must ask ourselves whether measures will be needed so that we can continue making payments in norwegian kroner efficiently and securely in the future. chart : central bank digital currency a key issue is whether norges bank should launch a central bank digital currency ( cbdc ). 13 unlike central bank reserves, which is electronic money for use solely by banks, a cbdc will be available to everyone, just like cash. and unlike e - money platforms or cryptocurrencies, a central bank will stand behind it and guarantee its value. if we introduce a cbdc at some point in the future, the purpose will be to safeguard confidence in the monetary system and to promote an efficient and secure payment system. we are also aware of a possible challenge : in principle, cbdc could cause disruption. like other new means of payment, it will compete with today ’ s deposit money. but unlike the other means of payment, money issued by a central bank will likely be perceived as a very safe alternative. that means it could replace a share of bank deposits – especially in turbulent times, which could engender serious spillovers to the wider economy. a basic premise of our work is that a cbdc must not significantly weaken other operators ’ possibility to provide credit. the purpose must be payment, not store of value

measures when overly large risks appear to be building up in the financial sector, but that the main responsibility must lie with other methods of regulating the relationship between capital and risks. the emphasis here is on regulatory frameworks and supervision. putting all of the responsibility on monetary policy would probably mean such high interest rates that they would have seriously negative repercussions for the real economy. moreover, the argument remains that it is difficult to determine when a credit boom changes from being beneficial for growth to becoming a risk that can trigger a financial crisis. i nevertheless think that the crisis has taught us that when we conduct monetary policy we must also follow a number of variables that are linked to the build - up of risk in the financial markets, primarily credit growth in different sectors of the economy. the fact that monetary policy alone cannot prevent financial crises does not mean that we can only look at an inflation target and otherwise disregard what a long period of low interest rates may entail with regard to risks in the financial system. this is also the view the riksbank has expressed in recent years, occasionally, one must say under strong criticism from both academics and various other parties in society. monetary policy can alleviate the consequences of the financial crisis the financial crisis has meant that the focus normally placed on monetary policy has been transferred to the measures taken to safeguard financial stability. monetary policy cannot be used to resolve acute problems in the financial markets. this requires a different type of measure, as i have already described. what role can monetary policy then play in the current situation? how has the riksbank formulated monetary policy during the autumn to counteract the negative events? on 8 october the riksbank took part in a joint action with other central banks to alleviate the consequences of the financial crisis. the riksbank, together with the bank of england, the ecb and the federal reserve, announced cuts in their monetary policy rates. the advantage with this type of coordinated action is that it reinforces confidence and increases the chances of the rate cut having positive effects. the riksbank cut the repo rate by 0. 50 percentage points in this action. at our most recent ordinary monetary policy meeting on 22 october the decision was to cut the repo rate by a further 0. 50 percentage points, to 3. 75 per cent. the riksbank adjusted its forecast for the repo rate path downwards, compared with that presented at the beginning of september. the members of the executive board were unanimous regarding both the repo