There is, unfortunately, a great deal of painful experience of the negative impact of high and volatile inflation on investment. And the adverse impact of the recent financial crisis on investment is clear. Indeed, as I have noted, it may still be with us in the form of higher hurdle rate risk premia. It is also important for the Bank to understand the drivers and obstacles to productive investment, even if the policy responses to obstacles are no longer primarily for us. Our monetary policy benefits from a better understanding of productivity and the supply side of the economy. Investment is an important channel through which monetary policy is transmitted. Understanding how businesses make investment decisions informs our understanding of the monetary transmission mechanism. On the financial stability side, our aim is a resilient financial sector that can support the economy even in times of stress. Diversity and robustness in the channels of finance to the real economy increases resilience. That is why we are interested in the way firms finance investments and the constraints they may face. And, of course, we have a secondary objective to support the economic policy of the Government. The work I have been drawing on today is part of our work to support the government’s productivity agenda and will I hope be helpful in developing policy responses that go wider than the Bank’s primary objectives.
In addition to the requirement for equal charges, the new Regulation envisages requirements with respect to currency conversion charges related to card payments and electronic credit transfers which are expected to increase transparency and to ensure comparability in cases where a payment service user is faced with a choice between currency conversion alternatives f. According to the requirements concerning currency conversion charges related to card payments, payment service providers and the parties providing currency conversion services at an automated teller machine (ATM) or at the point of sale shall provide information prior to the initiation of the payment transaction for the total currency conversion charges expressed as a percentage mark-up over the latest available euro foreign exchange reference rates issued by the European Central Bank. In addition, the payer must also be provided, prior to the initiation of the payment transaction, with information about the amount to be paid to the payee in both the currency used by the payee and in the currency of the payer’s account. With regard to the requirements for currency conversion charges related to electronic credit transfers, payment service providers will be obliged to inform the payer prior to the initiation of the payment transaction about the expected currency conversion charges applied to the credit transfer, the expected amount of the credit transfer in the currency of the payer’s account, as well as about the expected amount which will be transferred to the payee in the currency used by the payee.