Leo VAN HOVE
Central Banks and Payment Instruments: a Serious Case of Schizophrenia
Key words: payment instruments, central banks, cash, banknotes, payment cards, public policy, efficiency.

This article analyses the competition between cash and payment cards against the backdrop of the dual role of central banks - as issuers of cash and as institutions with a mandate to foster the efficiency of payment systems in general. It is argued that this dual role results in a number of policy dilemmas, namely concerning pricing, traceability of banknotes and the choice of denominations of coins and banknotes. On a general level, the article argues that central banks should place greater emphasis on improving the efficiency of retail payments and less on protecting their self-interest. More concretely, the article repeats the suggestion - originally put forward in VAN HOVE & VUCHELEN (1996) - that the ECB should place the upper limit of its banknote series at EUR 50 instead of EUR 500. It is also argued that policy makers should explicitly foster the use of cost-based pricing and in particular create a legal environment that makes it possible for commercial banks to start using it.

Kari TAKALA & Matti VIRÉN
Impact of ATMs on the Use of Cash
Key words: Cash, ATM, payment media, seigniorage.

This paper examines the role of cash usage in the development of payment media. For that purpose, the basic trends of change in payment media are scrutinized using European data. Although cash still clearly dominates in small retail payments, there has been a definite shift towards electronic payments in larger purchases and payment of wages and state benefits. At the same time, the distribution of cash has been moving from bank branches into ATMs. This paper focuses on the role of ATMs and ATM networks in dispensing cash. It is shown that ATMs have a very different effect on banks and consumers, which makes it difficult to predict future developments in ATM networks. During the past decade the number of ATMs has increased rapidly, but there are signs of saturation. The number of ATMs is not independent on the overall usage of cash in society. As for the use of cash, it also depends on choices that are made with respect to the ATMs, but demand for cash appears to be continuing to grow in absolute terms. To be able make predictions on the future course of development, we have to assess how such properties of cash as anonymity compare with speed and security. There has been no systematic assessment of this to date.

Alistair MILNE
Governance and Innovation in UK Retail Payments
Key words: bank payment services, financial infrastructure, payment schemes, payments governance, SEPA, technology adoption.

This paper discusses recent developments in the governance and innovation of UK retail payments. It is a follow up to an earlier paper (Ganguly and Milne (2002b)) an interview study with senior payments management in eight UK banks. That study identified concerns about governance and weak incentives for innovation as major issues for the operation of retail payments systems in the UK. The present paper reviews the subsequent experience in the UK and draws lessons for payments innovation and governance across the European Union.

Michel RUIMY
Is the Future of Money Electronic?
Key words: deterritorialization, Linden dollar, macro-economics, network, electronic money, method of payment, monetary policy.

In an age where Europe has introduced a single currency and new internet and communication technologies (NICTs) are widely used, the idea of a future electronic monetary system takes on a new significance. A plethora of currencies have gradually been created and the number of electronic transactions is growing dramatically. Bridges between "network" money and "real" money are already being considered. This paper aims to discuss the economic analysis of electronic money. It also considers the status of e-money by seeking advice on whether its legal framework should be regarded as a Local Exchange System. Does the concept of e-money challenge the notion of public interest? What is the potential impact of the circulation of network money on monetary policy? The article examines all of these questions, offering an up-to-date analysis of the subject.

Monica ARIÑO
Content Regulation and New Media: A Case Study of Online Video Portals
Key words: regulation, audiovisual, online video, web 2.0.

The delivery of audiovisual content is at the heart of the convergence process and, consequently, at the heart of current regulatory debates around convergence. Through a case-study of online video portals, this paper addresses the challenge to design a regulatory model for online video delivery, and considers how regulators need to adapt their roles and approaches. The discussion is informed by the new Audiovisual Media Services Directive, which modernises the European framework for content regulation.

Mauro MARTINO
Effectiveness of Traffic Direction Techniques in Mobile International Roaming and Implications for Market Definition
Key words: international roaming, traffic steering, captive markets, electronic communications.

This paper describes the techniques adopted to date by mobile operators to direct the traffic of their roaming customers abroad to specific and preferred foreign networks, and analyzes its effects from a regulatory point of view. It introduces some criteria, including a Traffic Steering Index, that allow regulators to assess whether, in a pair of mobile operators from two different countries, one adopts effective direction techniques to the other's network. Furthermore, the paper proposes a methodology for evaluating the share of roaming traffic that is effectively directed to a specified network by a given group of foreign operators, and hence a measure of a realistic direction efficiency. Finally, it briefly examines how the use of such technical methodologies could be employed in the definition of the markets related to international roaming, particularly when considering a market of captive traffic, namely traffic internalised between operators from different countries belonging to the same group/alliance.

James ALLEMAN is a professor in the College of Engineering and Applied Science, University of Colorado, Boulder. In the fall of 2005 Dr. Alleman was a visiting scholar at IDATE in Montpellier, France; previously, he was a visiting professor at the Graduate School of Business, Columbia University, and director of research at Columbia Institute of Tele-Information (CITI). Professor Alleman continues his involvement at CITI in research projects as a senior fellow. He has also served as the director of the International Center for Telecommunications Management at the University of Nebraska at Omaha, director of policy research for GTE, and an economist for the International Telecommunication Union. Dr. Alleman was also the founder of Paragon Service International, Inc., a telecommunications call-back firm and has been granted patents (numbers 5,883,964 & 6,035,027) on the call-back process widely used by the industry.

Monica ARIÑO works as an international policy advisor for Ofcom (the UK communications regulator) focusing on European content policies and convergence related issues. She has a Ph. D in law from the European University Institute (Florence). Prior to joining Ofcom she was a visiting lecturer at the Cental European University (Budapest).

Jacques BAJON joined lDATE in November 2000, working as a Senior television and new media Consultant. His assignments primarily involve strategic and sector-specific examination of the TV and Internet industries, in addition to devoting his efforts to examining new TV services and to monitoring leading media groups' strategies. Jacques's previous experience includes freelance writer for the Eurostaf group, carrying out market research and analysis of media and telecommunications industry companies, in addition to gaining experience in market analysis working for Ericsson. He holds a post-graduate research degree (DEA) in International Economics (Université Paris X Nanterre).
j.bajon@idate.org

Sophie BISMUT is a senior consultant at IDATE, specialising in the analysis of regulatory, competitive and strategic issues in the telecommunications industry. She is the lead author for two of IDATE's annual reports: World Telecom Services Marketnvolving ICT market assessment and strategic developments in Europe and in North Africa. Prior to joining IDATE in 2001, Sophie was a consultant for the OECD's Trade Directorate. She holds a master degree in Political Science from Sciences-Po Paris and in Economics from University of Paris Dauphine.
s.bismut@idate.org

David BOUNIE is an Associate Professor of Economics in the Department of Economics and Social Sciences at Télécom Paris, a position he has held since 2002. His current research interests include industrial organization applied to banking, payments, and the internet. Prior to his affiliation with Télécom Paris, Bounie served for three years as an economist with the Groupement des Cartes Bancaires "CB", the leading interbank payment and cash withdrawal system in France. He completed his graduate studies at the University of Paris 1 Panthéon-Sorbonne in public economics and received his Ph.D. in economics from Télécom Paris.

Marc BOURREAU is an Associate Professor in the Department of Economics and Social Sciences at Ecole Nationale Supérieure des Télécommunications (ENST, Paris). He is also a research associate with the laboratory of industrial economics (LEI) at the Center for Research in Economics and Statistics (CREST). Prior to joining the ENST faculty, Professor Bourreau worked for France Télécom as regulatory economist (1997-2000). He has a master's degree in engineering science from ENST. He also holds a Ph.D. in economics from Université Paris 2 Panthéon-Assas and an habilitation à diriger des recherches (Accreditation to direct research) from Université Paris 1 Panthéon-Sorbonne. His main research interests are economic and policy issues relating to broadcasting, telecommunications and the internet. He has published several articles on these topics in academic journals including The American Economic Review, The European Economic Review, Information Economics and Policy, Telecommunications Policy, Revue Economique and Revue d'Economie Politique.

Philippe CAMBRIEL began his career at Aerospatiale in 1983. From 1989 to 1996, he held various sales and marketing positions at Compaq in France and in Germany. From 1996 to 1998, he was general manager for IPC in France before managing the PC and Intel server unit of Bull. In 1998 he was appointed Chief Officer, sales and marketing at Bull CP8. From 2001 to 2003, Philippe Cambriel was Vice-President of Schlumberger's e-Transaction Cards business. In April 2003, he was appointed President of Schlumberger's Smart Cards business for Europe, the Middle East and Africa. He is currently executive Vice-President of Gemalto's Secure Transaction Business line. Philippe Cambriel is a graduate from the Ecole Nationale Supérieure de l'Aéronautique et de l'Espace (Sup'Aéro) and has an MBA from INSEAD. He is also a director of Axalto SP SA and Axalto RSA PTY.

Gilles FONTAINE is IDATE's Deputy Managing Director in charge of production, having previously headed up the Media Economics department. Prior to joining IDATE, and after a stint with the Ministry of Culture and the French radio broadcasting company SOFIRAD, Gilles worked for the national deposit and consignment office, La Caisse des dépôts et consignations, monitoring investments in a large number of media and multimedia companies. Gilles has also been involved in developing thematic TV channel operations. He holds a degree from the highly reputed French business school, HEC (Ecole des Hautes Etudes Commerciales, 1983) and from the Institut MultiMédias (1984).
g.fontaine@idate.org

For more than fifteen years, Yves GASSOT has been at the head of IDATE (www.idate.org), an institute that has established itself as one of the leading research centres in Europe concerned with the telecommunications, Internet and media industries. In this position, he has taken part in numerous studies of the various markets and the strategies being pursued in the telecommunications sector. He is on the panel of several expert committees, including the Conseil Général des Technologies de l'Information and the Advisory Committee of the PTC, he is special adviser of the European Commissioner of the Information Society, he serves as director of the journal COMMUNICATIONS & STRATEGIES and is scientific head of the annual International Conference of IDATE. With a background as DPLG architect, he is a graduate of the Institute of Political Studies, Paris (3rd Cycle).
y.gassot@idate.org

Sophie GIRIEUD is a junior consultant at IDATE, with media markets as her prime area of focus. Prior to this, Sophie worked as an economic consultant for France's National Centre for Cinematography's (CNC) Media Division, where she produced a report on funded media production and the CNC's involvement in animated productions in 2005, in addition to contributing to the Audiovisual Production Observatory. She is a graduate of the EDHEC Business School.
s.girieud@idate.org

Richard HAWKINS is Professor and Canada Research Chair in Science, Technology and Innovation Policy at the University of Calgary. He is a frequent advisor to governments and international organizations on technology and media issues.

Takeshi ICHIKAWA is currently assistant director of the E-Commerce Technologies Group, Multimedia Services Department, NTTDoCoMo Inc. He is involved in the technological implementation of DoCoMo's mobile contactless services using the i-mode FeliCa technology. His previous positions include assistant director of the Services Development Group, Platform Department, NTTDoCoMo Inc, where he participated in the development of next generation i-mode servers. He holds a master's degree in Information Engineering from Tohoku University.

Harry LEINONEN is adviser to the Board of the Bank of Finland on payment system policy issues. He is also the Finnish representative in the Payment and Settlement System Committee (PSSC) within the Eurosystem. Prior to holding these posts, he was head of payment systems and operations within the Finnish savings banks group and held various management positions in Okobank. He has actively participated in developing Finnish payment systems for over 25 years. He has also published numerous articles and books on payment system issues.

Denis LESCOP is associate professor of law and economics at the Institut National des Télécommunications (INT, Evry, France) and associate researcher at the Centre de Recherches sur les Stratégies Economiques (CRESE, Université de Franche Comté, France). His research focuses on the economic analysis of competition law and regulation in the electronic comunications and media sectors. Before joining INT, Denis worked as casehandler and economist for the Conseil de la Concurrence (French competition Council), where he was in charge of telecommuncations and media cases. Prior to that, he was head of the statistical observatory and external studies unit at the Autorité de Régulation des Télécommunications (now ARCEP). He holds a Ph.D. in Economics from the Université de Franche Comté.

Ghislaine MARTIN is Vice-President at Atos Origin where she is responsible for the banking market. Prior to joining Atos Origin in 2001, she worked as a consultant with Deloitte in the banking sector and as a signing officer at Credit du Nord. She holds a Ph. D in economics.

Mauro MARTINO is senior official with AGCOM, the Italian National Regulatory Authority for telecommunications and broadcasting. He is responsible for spectrum management and licensing procedures issues including UMTS, GSM; Wireless Local Loop, Radio-LAN; PAMR (Public Access Mobile Radio) and broadband wireless access (WiMax) licensing regulations. He is a member of the Radio Spectrum Committee at the EU Commission, which deals with spectrum harmonisation policy in the European Union. He is also a member of the groups of national experts mandated to assist the Commission in developing regulation for pan-European communication systems and of policy for rights of use and authorisations. He also actively works with the I/ERG (Independent / European Regulators Group) and participates in various working groups. In 2007 he is representing AGCOM in the I/ERG Contact Network, during the AGCOM Presidency, and is a member of the Secretariat. Before joining AGCOM in 1999, he worked in the private sector, with companies in the telecommunications and ICT sectors.

Alistair MILNE is senior lecturer in banking and finance at Cass Business School, director of the Centre for Research into European Financial Markets and Institutions and visiting scholar at the Monetary Policy and Research Department of the Bank of Finland. Previously he has been an economic adviser to the Financial Intermediaries Division of the Bank of England; a lecturer in economics at the University of Surrey, a research fellow at London Business School and has worked as a macroeconomist for HM Treasury and the Government of Malawi. He holds a Ph.D. from the London School of Economics and has published papers on a wide range of academic and policy topics. He teaches courses on banking, risk management, credit risk, and systems of payment and settlement. His recent research has focused on: enterprise risk management in banking and how this interacts with capital management and regulation; competition in the area of securities processing and payment systems, with reference to the establishment of a single European financial market; and the impact of capital market frictions on corporate and household behaviour and the business cycle.
http://www.cass.city.ac.uk/faculty/a.milne/index.html
amilne@city.ac.uk

Michel RUIMY is currently an economist in a major French financial institution based in Paris. He is the author of several books and articles on finance, and more particularly on problems related to monetary issues. He also holds various teaching positions in business schools and universities including the Paris Institute of Political Science and ESCP-eap.

Kari TAKALA is senior adviser in the Currency Department of the Bank of Finland. He has dealt with cash issues since 2003 and is also the Finnish representative in the Banknote Committee of the European Central Bank. He previously lectured in economics at the University of Helsinki, Finland. His dissertation deals with applied time series econometrics. His other publications are related to areas of consumer economics and macroeconomic forecasting such as the use of confidence surveys in forecasting.
kari.takala@bof.fi

Leo VAN HOVE is an Associate Professor of Economics at the Vrije Universiteit Brussel (Free University of Brussels), where he teaches courses in monetary economics, internet economics and e-commerce. His current research interests include e-money, the use of currency and e-publishing. He maintains a comprehensive reference database on e-purses as part of the ePSO website of the European Central Bank.
http://econ.vub.ac.be/cfec/leo.htm

Matti VIRÉN is a professor of economics at the University of Turku, Finland, and a scientific advisor to the Bank of Finland. His previous posts include research director in the Government Institute for Economic Research (Finland) and pre-accession advisor in the Ministry of Finance, Poland. He has published extensively, producing over 100 journal articles and 12 books. His research interests include payment systems, monetary and fiscal policy and policy-coordination. With regard to payment systems, he has studied the demand for cash, financial innovations and currency substitution.
matti.viren@bof.fi