gertrude tumpel - gugerell : sepa goes live speech by ms gertrude tumpel - gugerell, member of the executive board of the european central bank, at the launch event organised by the european commission, the european central bank and the european payments council, brussels, 28 january 2008. * * * the countdown is over! today, 28 january 2008, sepa goes live! i am pleased to welcome you all to the launch of sepa. first and foremost, i would like to take this opportunity to thank the european commission for hosting today ’ s event and for its cooperation over the last few years, the fruit of which can been seen today as sepa comes to life. those who have made sepa a reality, the banks and the service providers are here tonight and i would like to congratulate them all. let me also mention the work of the council and the european parliament that has contributed to making sepa a reality. nine years ago we introduced the single currency. today, we launch sepa – another important step in european integration. but let me assure you : today is only just the beginning! sepa is all about integration, harmonisation and modernisation. it is a natural consequence of the single currency and a major step in the creation of the single market. that is why the ecb has supported the project closely over the past six years. today ’ s launch is the first visible result. a single currency – with a single set of payment instruments – in a single euro payments area. with sepa, this becomes a reality. and we, as euro area citizens, will be able to make euro payments as cheaply, as easily and as safely as we do national payments. all euro payments will be “ domestic ” ; finally, there will be no difference between sending a payment from rome to dublin or from brussels to antwerp. we can now make payments not only with euro notes and coins, but harmonised electronic payments by european credit transfer, direct debit and payment card as well. an important milestone has been reached today with the launch of “ sepa credit transfer ”. we are now able to send euro payments quickly, and in the same way, to any beneficiary in europe. this will be followed by “ sepa direct debit ” before the end of 2009. as a result, we will be able to make direct debit payments across europe, as if no borders existed. with the “ sepa

maintained more efficiently and output volatility reduced. although clear communication of the objectives, the policy strategy and of the decisions taken is necessary to anchor inflation expectations, it is not sufficient. a central bank must demonstrate its commitment and ability to achieve its objectives by the systematic implementation of its policies. markets and the general public need to be convinced by central bank communication and policy action that are both consistent and effective. this will ensure the predictability and credibility of monetary policy, which are vital for the effective management of expectations. moreover, a predictable and credible monetary policy, underpinned by high transparency and clear communication, will reduce uncertainty, thus facilitating decision - making and the efficient pricing of assets in a manner that contributes to the attainment of policy objectives. there is a growing body of empirical evidence that supports the validity of the previous arguments concerning the value of high transparency and good communication for policy effectiveness and market efficiency. 1 i will elaborate on this with regard to the ecb ’ s communication strategy. but before doing this, i would like to make one additional general remark about the extent of central bank transparency and the desirable features of policy communication. monetary policy transparency and communication are beneficial when they help the central bank to achieve its objectives by enhancing the understanding of the markets and the public of the policy aims, strategy and decisions, thereby offering clear guidance for the formation of expectations as well as reducing uncertainty. transparency means more than simply releasing information. the provision of more information does not necessarily lead to a better see, for example, levin, natalucci and piger ( 2004 ) ; castelnuovo, nicoletti - altimari, and rodriguez palenzuela ( 2003 ) ; gurkaynak, levin and swanson ( 2006 ) ; and lange, sack and whitesell ( 2003 ). understanding of monetary policy. what is needed is the provision of comprehensive and relevant information in a clear and timely manner. the challenge is to strike the right balance between the quantity and quality of information and to communicate the relevant messages with clarity so as to contribute to the understanding, predictability and credibility of monetary policy, and thus to its effectiveness. iii. the ecb ’ s concept and practice of transparency and communication iii. 1 communicating the monetary policy objective and strategy let me now turn to the ecb ’ s concept and practice of transparency and communication. the eu treaty and the ecb statute clearly state that the primary objective of monetary policy is to maintain price stability. but they do not define a