payments under the same basic rights and conditions for their citizens and businesses as in the eu. and the impact of sepa clearly goes beyond europe. international initiatives such as the international payments framework ( ipf ) see the sepa schemes as a blueprint for developing their own schemes. even in china, bankers know that sepa does not stand only for the chinese state environmental protection administration, but for a pan - european initiative that they are watching with great interest. all this shows that we are on the right path, and that we have an international role to play in retail payments. however, this needs to go both ways. particularly in the area of standardisation, the coordinated presence of european payment service providers, schemes and processors is required to ensure that changes in global standards that may affect sepa schemes, frameworks and guidelines are identified in a timely manner. in the 7th sepa progress report, the eurosystem identified a strong need for the direct and coordinated involvement of the european payments industry in global card standardisation bodies. in this respect, we welcome the epc ’ s presence on the advisory boards of emvco and pci, and the negotiation of memoranda of understanding with these two entities. conclusion with the publication of the 7th sepa progress report in october 2010, the eurosystem, in its role as catalyst, provided analysis and guidance on the way forward for sepa in the forthcoming period. in today ’ s speech, i have discussed some factors at a broader level : innovation, striking the right balance between the cooperative and the competitive space, and the positioning of european retail payments at a global level. to drive the future development in retail payments, payment service providers and public authorities / regulators will have to be able to respond proactively to these factors. the three “ es ” – the european payments council, the eurosystem and the european commission – largely favour the integration and modernisation of the retail payments market. while there are sometimes differences in their understanding of how best to achieve these goals, i am confident that we have managed, and will continue to manage, to successfully drive our vision of sepa forward. thank you very much for your attention. bis central bankers ’ speeches

important, if elementary. individual banks have also been able to increase their exposure to borrowers with which they do not have a lending relationship. ( indeed, some commentators suggest that it may sometimes be more effective for second - tier and smaller banks to take corporate credit exposure via the derivatives market than via participation in the lower tiers of loan syndicates. ) if, overall, the result were a greater dispersion of risk around the banking system and fewer large exposures relative to capital, the system as a whole would probably be safer even if, net, no credit risk had left the banking industry in aggregate. according to various surveys, some credit risk has been shed to non - banks, including insurance companies, pension funds and hedge funds. that too should, on balance, promote the resilience of the system, not least because non - banks are not part of the core payment systems that underpin our financial markets – provided, of course, that banks prudently manage their counterparty exposures to non - bank sellers of credit protection. as others have argued, this is a change of degree rather than kind : with the growth of corporate bond markets, and especially securitisation, non - banks have been my thanks to mike cross, colin miles and david rule for long - running debates on the issues discussed here. for comments, to peter andrews, andrew bailey, alex bowen, alastair clark, paul fisher, damien lynch, peter westaway and simon wells. and to sandra bannister for secretarial support. for an early review, see rule, d, ( 2001 ) ‘ the credit derivatives market : its development and possible implications for financial stability ’, financial stability review, issue 10, june 2001, pages 117 - 140 and rule, d, ( 2001 ), ‘ risk transfer between banks, insurance companies and capital markets : an overview ’, financial stability review, issue 11, december 2001, pages 137 - 159. running credit portfolios for years. by separating the provision of liquidity from exposure to credit risk, credit derivatives, and the related developments in structured finance, give non - banks new ways of accessing credit risk. as well as more dispersed risk buttressing systemic stability, the innovation of credit derivatives has plausibly taken us a further step towards complete markets, in effect providing a richer market for credit insurance than previously existed. investors and others may, therefore, be able to get a little closer to the portfolios they really