There is also a risk that the market will become fragmented and by this I mean that there may be a number of different payment solutions, but that none of them is generally accepted by the payment recipients. One example could be mobile payments. If the launch of new mobile payment services continues, perhaps I as consumer will need to have a couple of different payment applications in my mobile phone to be sure of being able to pay in different shops. Similarly, the retailer will then need to subscribe to several different payment services. Last year, an inquiry on the use of cash in Sweden was published, and earlier this autumn the commission of inquiry presented its report entitled Cash management in Sweden. This inquiry has resulted in a number of proposals and I will discuss two of them here. The first is that it is proposed that the Riksbank has overall responsibility for cash management in Sweden. The second is that the counting services of cash-in-transit companies should become subject to licence and come under financial supervision. It is recommended that the Riksbank become the supervisory authority for these operations. The Riksbank welcomes the work of the inquiry as we consider it important that cash management in Sweden functions smoothly. We have taken part in the work of the inquiry and will now analyse the proposals put forward and respond to the submission sent out for comments.
3  BIS Review 56/1999  Monetary policy operates on the demand side of the economy, and essentially what we can hope to do – and what we are aiming to do - is to keep overall demand broadly and continuously in line with the underlying supply-side capacity of the economy to meet that demand. How close we come – on average and over time – to meeting the 2½% inflation target is in effect simply a measure of our success in achieving macro-economic stability in this wider sense. We cannot directly affect supply-side capacity – the underlying rate of growth that we can expect to sustain. But, by operating symmetrically – as we have shown that we do – we can provide an environment in which supply-side improvements (for example, more rapid productivity growth which apparently explains the stronger performance of the US economy in the past few years, but which we have yet to see in this country on anything like the same scale) have the best chance of feeding through into faster sustained output growth. And, to the extent that we are successful in maintaining macro-economic stability, that can help to improve our supply-side performance indirectly by lowering real long-term interest rates and encouraging better decision–making in the economy as a whole with less distortion from unnecessary erratic movements, particularly in nominal values. But we can only hope to maintain macro-economic stability for the economy as a whole.