And we should expect that trend to continue for a number of reasons. First, and most obviously, what I have called the digitalisation of everyday life will continue. The growth of internet commerce or use of banking and payments apps, for example is forecast to grow/unlikely to stop. Second, there are further developments in train within existing payment systems, infrastructure and regulatory frameworks. These include Pay.UK’s development of the New Payments Architecture[5]. The Bank of England is well advanced in the build and implementation of a new central bank real time payment system (RTGS), the central rail of the current UK payments infrastructure. This renewal programme will increase resilience and access, and offer wider interoperability, improved user functionality and strengthened end-toend risk management of the UK’s High Value Payment System. As announced this morning, the government and regulators[6] will expand the Open Banking framework through making improvements on API performance, improving the provision of information sharing to third party providers and working towards additional functionalities, such as variable recurring payments. Third, and looking a little further into the future, over the last decade a set of newer technologies have emerged which may have the potential for a further transformation in payments. I am referring here to technologies that have been pioneered and refined in the crypto world, such as tokenisation, encryption, distribution, atomic settlement and smart contracts. These developments have been much hyped of course, and one could not say it was a certain bet that they will be as transformative as some have claimed.
The role of the Riksbank in this situation is, when necessary, to be able to provide liquidity assistance at short notice. With today’s Swedish banking system, it may also be necessary to provide such assistance in foreign currencies. We therefore asked the National Debt Office on two occasions to borrow foreign currency on our behalf to strengthen the currency reserve. All in all, we borrowed foreign currency to a value equivalent to SEK 200 billion. However, the foreign currency reserve has grown by SEK 325 billion, while the strengthening by means of the National Debt Office loans amounted to SEK 200 billion. The difference is partly due to the krona being weak during 2014 and the value of the foreign currency reserve, measured in krona, therefore having increased. The krona depreciation is also visible in the fact that the value of the foreign currency loans, which a year ago was SEK 193 billion, now amounts to SEK 228 billion. But the foreign currency reserve has also grown as a result of the return on the bonds in the foreign currency reserve being reinvested in new bonds instead of used to pay dividends to the government. As a result of this, the Riksbank has instead had to borrow from the banks that are its monetary policy counterparties to pay the dividends.