After the Second World War, there was a long period of trying to achieve price stability by means of various intermediate targets such as a fixed exchange rate and a target for growth in the money supply. The first explicit inflation target was introduced in New Zealand in 1990. Canada followed in 1991, the UK in 1992, and Sweden and Australia in 1993. Inflation targeting is now the norm in small and medium-sized open economies. Denmark is an important exception. Since the mid-1980s, Denmark has conducted a very disciplined fiscal and wage policy. Combined with ERM II membership, this has enabled Denmark to maintain a credible and successful fixed exchange rate regime. Pursuant to the Regulation on Monetary Policy laid down by the Government on 29 March 2001, the operational objective of monetary policy is low and stable inflation. Norway’s mandate is as follows: “Monetary policy shall be aimed at stability in the Norwegian krone’s national and international value, contributing to stable expectations concerning exchange rate developments. At the same time, monetary policy shall underpin fiscal policy by contributing to stable developments in output and employment. Norges Bank is responsible for the implementation of monetary policy. Norges Bank’s implementation of monetary policy shall, in accordance with the first paragraph, be oriented towards low and stable inflation. The operational target of monetary policy shall be annual consumer price inflation of approximately 2.5 per cent over time. [...]” The first paragraph of the mandate sets forth its intentions.
Security of payments The rapid development of e-commerce in recent years and the increased use of electronic channels to initiate payments pose new challenges related to ensuring the security and customers’ data. As of September 2019, it has become mandatory in Europe to implement strong customer authentication. This means that when an electronic payment is initiated, at least two independent elements from different categories – knowledge, possession and inherence – must be used in the process. In the case of remote payment transactions, e.g. via internet, an additional requirement is introduced to perform so-called dynamic linking – linking the code for each transaction to a specific amount and a specific payee. These requirements are implemented by the payment service providers in our country. For the practical implementation of these regulatory requirements, new technologies are again coming to the rescue. Recently, biometric authentication has shown great potential by providing verification of elements characterising the user: fingerprint, iris scanning, facial recognition, etc. Many payment service providers in Bulgaria have already introduced similar customer identification methods using mobile banking applications. Apart from convenience, this leads to a significant increase in the security of the payment process, allowing the use of biometric data for customer identification. On the occasion of the forthcoming review of the Second Payment Services Directive, a comprehensive assessment of the impact of strong customer authentication on the level of payment fraud is to be carried out.