We are, I think, just starting to see examples in the UK where cash is not accepted and only electronic payment can be used. It is not clear how far and how fast that trend will go. The Bank is responsible for producing cash people can use with confidence and facilitating its use/distribution and collection by the private wholesale sector. We are working with the cash industry to ensure that changes in the way wholesale cash is distributed are sustainable and effective whilst maintaining or enhancing access to cash services. Beyond that, other authorities have more direct responsibilities and powers with regard to the public’s direct access to cash. The Treasury has established the Joint Authorities Cash Strategy Group to co-ordinate all the authorities with responsibilities for cash.10  Improving the current system  The declining use of cash, of course, is a result of changes in the way we live and transact with each other in a digitalised economy made possible by changes in technology. Technology has made electronic payment in commercial bank money cheaper and faster. In the UK the Faster Payments Service, launched in 2008 now processes around £ trillion a year. Regulatory change, such as the EU Payment Services Directives, the UK Open Banking reforms and the creation in the UK of an economic regulator for payments, the Payment Systems Regulator, has opened the payments industry up to more competition.
The report of the CGFS Working Group on "FDI in the financial sector of EMEs" highlighted that a lasting benefit of these FDI was their effects on the financial sector efficiency, thanks to the generally associated technology transfers and innovations in products and processes. In addition to their lower volatility, this is one more reason why attracting long-term capital flows, such as FDIs, seems preferable to catching short-term flows, although the lessons from the Chilean experience versus some Asian misadventures suggest there is no unique model for all. But I saw that the size of FDIs in India which had been hitherto rather low is rising significantly (16 billions USD in 2006-07) which is good sign of its attractiveness. In France also we pay a lot of attention to inflows of FDIs (above 60 billions in 2006) as they matter as well in a more mature economy. So when setting the pace of internal versus external liberalisation, the authorities have to strike the right balance and rhythm between the two sides. In this respect, let me evoke briefly the way we managed this process in France in the 1980s. Financial liberalisation started with the domestic side by: •  Modernising the money market;  •  Deepening the bond markets, using the public sector as a benchmark (in order to price risks through a full yield curve for risk-free assets);  •  Broadening the basis of the equity markets (including privatisations);  •  Last but not least, creating new financial markets (futures, options…).