Spencer Dale: Separating fact from fiction – household balance sheets and the economic outlook Speech by Mr Spencer Dale, Executive Director and Chief Economist of the Bank of England, at a lunch hosted by the Exeter Chamber of Commerce, Exeter, 24 September 2009. I would like to thank Andrew Benito, Rohan Churm and Richard Williams for their considerable help in preparing these remarks. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. *  *  *  I would like to thank the Exeter Chamber of Commerce for this invitation to speak to you today. I have strong ties to this part of the country. My family moved to Exmouth when I was 16. My father still lives in Exmouth and my parents-in-law in Exeter. So I visit here often. Exeter was the place that I first studied economics. My family moved to Devon just after I had completed my “O levels” and I studied for my “A levels” at Exeter college, just a few minutes walk from here. In fact after today’s lunch, I am going back to Exeter college to see my old economics tutor – who still teaches “A level” economics – and to spend some time meeting the current students. So it is a real pleasure to be here. The economy appears to have turned. Following the extraordinary falls in output at the end of last year and the beginning of this year, output appears to have stabilised.
standardisation in cards, payment innovations, a migration end date, and the governance of payment issues at the European level. 4  BIS Review 74/2009  Harmonisation in the field of retail payments is a natural area for efficiency gains. However, the market is moving only slowly in this direction. Although SEPA continues to be a mainly self-regulated project, some elements might need more regulator involvement. The Eurosystem has emphasised that a realistic but ambitious SEPA migration end date is necessary. Such a date would facilitate communication and provide more certainty for all stakeholders. The most viable option for achieving an end date is through regulation by the public authorities. Since an EU regulation is probably the most effective option the Eurosystem appreciates the Commission’s launch of a public consultation on this topic. Only by tearing down the walls of fragmentation can we ultimately bring about harmonisation, efficiency gains and a level playing-field. Such a development inevitably leads to increased competition. I am fully aware that it is not easy – especially in a period of low growth and higher credit risks – to change revenue models. However, those who invest early will benefit and position themselves successfully. Corporates tell us that they would benefit from SEPA services because they are internationally connected. Taking into consideration the renewed relevance of retail payments, the key success factors in the years ahead will be harmonisation, innovation and increased competitiveness. Banks and infrastructures will successfully take up these challenges only by continuing to play an important role in retail payments.