ANNUAL REPORT 2008 - Polymer Bank Notes of the World

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ELIGIBLE LINKS BETWEEN NATIONAL SECURITIESSETTLEMENT SYSTEMSNational SSSs can be linked by means ofcontractual and operational arrangements toallow the cross-border transfer of eligiblesecurities between systems. Once eligiblesecurities have been transferred via such linksto another SSS, they can be used through localprocedures in the same way as any domesticcollateral. 60 direct and 6 relayed links arecurrently available to counterparties, but onlya limited number of them are actively used.Furthermore, these links only cover part of theeuro area. Links become eligible for Eurosystemcredit operations if they fulfil the Eurosystem’suser standards (see Section 4 of Chapter 4).The amount of collateral held through linksincreased from €125 billion in December 2007to €148 billion in December 2008, butaccounted for only 8.3% of the total collateral(both cross-border and domestic) held by theEurosystem in 2008, compared with 8.9%in 2007.ECBAnnual Report2008117
3 BANKNOTES AND COINS3.1 THE CIRCULATION OF BANKNOTES ANDCOINS AND THE HANDLING OF CURRENCYDEMAND FOR EURO BANKNOTES AND COINSAt the end of 2008 the number of euro banknotesin circulation stood at 13.1 billion, with a valueof €762.8 billion. This represented an increaseof 8.3% in terms of volume and 12.7% in termsof value compared with the levels at the end of2007 (12.1 billion banknotes with a value of€676.6 billion).Following the intensification of the financialmarket turmoil, a strong increase in the numberof euro banknotes in circulation was recordedin the first half of October 2008, equivalent to avalue of €35 to €40 billion.In the last quarter of 2008 demand wasparticularly high for the denominations €100 and€500 and was to a large extent driven by demandfrom outside the euro area. As a result, by theend of the year the average value of a banknotein circulation had increased to €58.15 (comparedwith €55.85 at the end of the previous year).Statistics indicate that net shipments of eurobanknotes by euro area credit institutions todestinations outside the euro area reached atotal value of around €96 billion by the endof December 2008, which represents a shareof 13% of the total value of euro banknotes incirculation. These shipments were due to anincrease in demand from foreign residents.Given that there are additional reasons for eurobanknotes to travel beyond the euro area (suchas tourism or guest worker remittances), it isestimated that, in value terms, close to 20% ofthe euro banknotes in circulation are held bynon-euro area residents.Charts 46 and 47 illustrate the steady increasein the total number and value of euro banknotesin circulation, together with the annual growthrates.Looking at the breakdown of the denominations,the €500 banknote, which is to a large extentused for hoarding, showed the strongest growthin circulation, rising by 17.1% at the end of 2008compared with one year earlier. It was followedby the €100, €50 and €200 banknotes, whichrose by 14.2%, 10.6% and 9.3% respectively.The number of the lower denominations incirculation rose at rates of between around 3%and 6% (see Chart 48).Chart 46 Number of euro banknotes incirculation between 2002 and 2008Chart 47 Value of euro banknotes incirculation between 2002 and 2008annual growth rate (percentages; right-hand scale)total number (billions; left-hand scale)annual growth rate (percentages; right-hand scale)total value (EUR billions; left-hand scale)14258006013121120157006005040109105500400308760-5300200201052002 2003 2004 2005 2006 2007 2008-101002002 2003 2004 2005 2006 2007 20080Source: ECB.Source: ECB.118 ECBAnnual Report2008
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EN2008EUROPEAN CENTRAL BANK ANNUAL
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© European Central Bank, 2009Addre
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CHAPTER 4FINANCIAL STABILITY AND IN
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7 Statistical accounting consequenc
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ABBREVIATIONSCOUNTRIESOTHERSBE Belg
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in the course of the year, in line
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currencies, T2S will be a major ste
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CHAPTER 1ECONOMICDEVELOPMENTS ANDMO
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Chart 1 ECB interest rates and mone
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Despite moderating, the annual grow
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substantial downward revisions in r
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in July, annual inflation in the OE
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As regards the Chinese economy, rea
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generally tighter financing conditi
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were recorded in December, but thes
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was driven mainly by developments i
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market tensions, particularly for l
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anking and financial system. At the
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cash flows to compensate for a redu
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quarter of 2008 and -0.1% in Decemb
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whereby investors’ uncertainty su
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September onwards, amid the great u
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Chart C Trading volumes for governm
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sponsored rescue plans were initiat
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The annual growth rate of consumer
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end of 2007. By December 2008 this
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calculated as the balance between g
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commodity prices (see Box 4). Conve
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Chart D Longer-term inflation expec
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apidly to 1.7% in December, mainly
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productivity slowed to 0.2% in the
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Table 3 Composition of real GDP gro
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Corporate investment, which had exp
Page 68 and 69: Box 5LABOUR MARKET DEVELOPMENTS IN
Page 70 and 71: Chart C Breakdown of employment gro
Page 72 and 73: Box 6DEVELOPMENTS IN THE ISSUANCE A
Page 74 and 75: Chart B Government bond yield sprea
Page 76 and 77: Box 7STATISTICAL ACCOUNTING CONSEQU
Page 78 and 79: warranted because of the need to co
Page 80 and 81: sharp depreciation of the euro was
Page 82 and 83: prices in the first eight months of
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Page 86 and 87: segments and, in turn, affected eur
Page 88 and 89: and Bulgaria registered robust grow
Page 90 and 91: In the remaining non-euro area EU c
Page 92 and 93: Estonian kroon and the Lithuanian l
Page 94 and 95: Table 10 Official monetary policy s
Page 96 and 97: the Bank of England and Sveriges Ri
Page 98 and 99: CHAPTER 2CENTRAL BANKOPERATIONSAND
Page 100 and 101: Box 10MONETARY POLICY OPERATIONS DU
Page 102 and 103: Chart A Liquidity supply through op
Page 104 and 105: franc funding needs of banks with n
Page 106 and 107: MINIMUM RESERVE SYSTEMCredit instit
Page 108 and 109: with the ample allotments in the fi
Page 110 and 111: 2008. By contrast, the average shar
Page 112 and 113: and SDR holdings increased by aroun
Page 114 and 115: and the ECB). As a result of carefu
Page 116 and 117: cross-CSD settlement. T2S will thus
Page 120 and 121: Chart 48 Number of euro banknotes i
Page 122 and 123: 3.3 BANKNOTE PRODUCTION AND ISSUANC
Page 124 and 125: 4 STATISTICSThe ECB, assisted by th
Page 126 and 127: iii) payments statistics and iv) de
Page 128 and 129: 5 ECONOMIC RESEARCHThe main functio
Page 130 and 131: were organised to disseminate resea
Page 132 and 133: the Financial Collateral Directive,
Page 134 and 135: on the Banque centrale du Luxembour
Page 136 and 137: standards by individual Eurosystem
Page 138 and 139: CHAPTER 3ENTRY OF SLOVAKIAINTO THE
Page 140 and 141: Table 13 Main economic indicators f
Page 142 and 143: As of January 2009 Slovakia is thus
Page 144 and 145: 3 OPERATIONAL ASPECTS OF THE INTEGR
Page 146 and 147: 4 THE CASH CHANGEOVER IN SLOVAKIATH
Page 149 and 150: Willem F. Duisenberg accepting the
Page 151 and 152: 1 FINANCIAL STABILITYThe Eurosystem
Page 153 and 154: With regard to merger and acquisiti
Page 155 and 156: with the principles set out in Octo
Page 157 and 158: 2.2 BANKINGCAPITAL REQUIREMENTS DIR
Page 159 and 160: 3 FINANCIAL INTEGRATIONThe Eurosyst
Page 161 and 162: The market for short-term paper in
Page 163 and 164: de France and the Banca d’Italia.
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Page 167 and 168: 4.2 RETAIL PAYMENT SYSTEMS ANDINSTR
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for Clearing and Settlement, and th
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Willem F. Duisenberg at his farewel
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1 EUROPEAN ISSUESIn 2008 the ECB co
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for financial institutions, to faci
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1.3 DEVELOPMENTS IN AND RELATIONS W
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On a number of occasions in 2008, t
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countries have voiced support for t
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Former Italian President Carlo Azeg
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1 ACCOUNTABILITY VIS-À-VIS THE GEN
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implementation of the steps foresee
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CHAPTER 7EXTERNALCOMMUNICATION
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2 COMMUNICATION ACTIVITIESThe ECB a
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Panel at the Fifth ECB Central Bank
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1 DECISION-MAKING BODIES AND CORPOR
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Council decided on the main aspects
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1.3 THE EXECUTIVE BOARDThe Executiv
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1.4 THE GENERAL COUNCILThe General
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The Eurosystem/ESCB committees have
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members of the Executive Board. 13
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for their current position. On the
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statistical office (Statistisches B
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4 ANNUAL ACCOUNTS OF THE ECB212 ECB
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function, and by the Governing Coun
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BALANCE SHEET AS AT 31 DECEMBER 200
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PROFIT AND LOSS ACCOUNT FOR THE YEA
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mid-market prices on 30 December 20
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The defined benefit obligation is c
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NOTES ON THE BALANCE SHEET1 GOLD AN
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Eurosystem (see “Banknotes in cir
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(see “Banknotes in circulation”
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values at which the transactions we
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15 CAPITAL AND RESERVESCAPITALPursu
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epresenting the remainder of its ca
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NOTES ON THE PROFIT AND LOSS ACCOUN
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individual circumstances. Basic sal
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5 CONSOLIDATED BALANCE SHEET OF THE
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ANNEXES
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Number Title OJ referenceECB/2008/1
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Number Title OJ referenceECB/2009/1
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Number 2 Originator SubjectCON/2008
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Number 4 Originator Subject OJ refe
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oth the marginal lending facility a
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OVERVIEW OF THE ECB’S COMMUNICATI
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y the respective NCBs will also be
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OPEN MARKET OPERATIONS BY CURRENCYE
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USD operationsType oftransaction 1)
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DOCUMENTS PUBLISHED BY THEEUROPEAN
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95 “Financial stability challenge
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1012 “Petrodollars and imports of
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GLOSSARYThis glossary contains sele
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Economic analysis: one pillar of th
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Financial stability: condition in w
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MFIs (monetary financial institutio
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Reserve base: the sum of the eligib
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ANNUAL REPORT 2008 - Polymer Bank Notes of the World

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