Mojmír Hampl: The EU banking industry Speaking points by Mr Mojmír Hampl, Vice Governor of the Czech National Bank, at the European Economic Congress “Section: Banking Industry in the EU”, Katowice, 15 May 2012. *  *  *  “Dzen dobry” – this is unfortunately the only thing I can credibly say in Polish, so the rest will be in my imperfect English. Thanks to the organizers for the invitation and for the opportunity to participate in such a distinguished panel. It is my first time here and I can only hope not the last one after I finish my presentation. Given the time constraints I will focus on a just a couple of quick points to stimulate the debate. My key point is: Let’s not repeat the same mistakes again and again. What I mean is this: Since the onset of the current crisis there has been a constant push for a more pan-European, or “federal-like”, approach to the regulation, supervision and potentially also resolution of the financial industry in the EU. The famous de Larosière report and all its consequences, such as the three new pan-European supervisory agencies, are just direct results of this push and this way of thinking. Some may recall that the Czech authorities were quite reluctant to accept this approach and also the final compromise which brought these agencies into existence, and we believe we had good reasons for this.
Is it a problem if cash disappears? This is of course a valid question. There are some groups in society who for various reasons find it difficult to accept, use or gain access to digital technology and different solutions need to be found for these groups. But for the majority of the population, the market appears able to supply payment solutions on its own. The question does require some careful thought, however. What is money, and what is required for money to function as such? What is the difference between various types of money? Why have central banks gained such a central role in the monetary system? These are practical but nevertheless almost philosophical questions that cannot be fully dealt with in a short speech. But allow me to nevertheless develop these questions a little further. Can “new money” function as an arithmetical unit, store of value and means of payment? It is difficult to define what money actually is. Put simply, one can say that it is an agreement or convention between individuals in a country or region that “something” will function as money. That “something” can be stones, shells, gold, pieces of paper or something else. What has been used as money has varied over time and between countries and cultures. But for money to function as such, it must be 3 [6]  able to guarantee three basic functions. Firstly, it shall function as (1) an arithmetical unit, that is, all prices shall be expressed in terms of this unit.