One of the aims of the merger is to be better positioned to compete with global companies. New market entrants and lower entry barriers promote competition, but there are other mechanisms that could weaken competition in the longer term. One example is if one or a small number of multinationals become dominant payment service providers at the global level. The key words are digital platforms and network effects. Marketplaces such as stock exchanges and shopping centres have existed for a long time. But digital marketplaces, known as platforms, are far more scalable. Well-known examples of digital platforms are Google, Facebook and the classified ad portal Finn.no. These platforms achieve competitive advantage by gathering information about customers, eliminating time-consuming tasks and simplifying users’ everyday lives. Platforms have network effects. Competition can be impaired if platform companies exploit their market power. A large user base makes it profitable for other service providers to develop complementary services. Because of network effects, dominant platforms can achieve a nearmonopoly position. Operators that control parts of the payment infrastructure can shut out competitors. For instance, Apple Pay is the only option for contactless payments based on near-field communication (NFC), using Apple’s iPhones. A number of countries are considering whether this constitutes abuse of a dominant market position. In Norway, this would be a matter for the competition authorities. 1/5  BIS central bankers' speeches  Payment solutions should build on a common underlying infrastructure that enables payments to be carried out swiftly, safely and at low cost.
BIS central bankers’ speeches  3  A more expansionary monetary policy gives better target fulfilment My view of monetary policy implies that at each monetary policy meeting one should choose the repo-rate path that with the corresponding forecasts for inflation and unemployment best stabilises inflation around the target and unemployment around a long-run sustainable rate. It should not be the case that a lower or higher repo-rate path leads to better target fulfilment for both inflation and unemployment. In other words, it should not be the case that inflation and the inflation forecast are below the target while unemployment and the unemployment forecast are above a long-run sustainable rate. Based on Norwegian central bank deputy governor Qvigstad’s (2005) criteria for a good repo-rate path, this can be worded as: For monetary policy to be well-balanced, the inflation gap (the gap between inflation and the target) and the unemployment gap (the gap between the unemployment rate and the longrun sustainable unemployment rate) should have the same sign. My view is also that the target fulfilment for inflation and unemployment during the entire forecast period is what is important, not just the target fulfilment at the end of the forecast period. For an unemployed person there is a major difference between getting a job in one or two years’ time and getting one in three years’ time.