ANNUAL REPORT 2008 - Polymer Bank Notes of the World

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Chart 48 Number of euro banknotes in circulation between 2002 and 2008(millions)EUR 500EUR 200EUR 100EUR 50EUR 20EUR 10EUR 51,4001,4005,0005,0001,2001,0008001,2001,0008004,0003,0004,0003,0006004002006004002002,0001,0002,0001,00002002 2003 2004 2005 2006 2007 2008002002 2003 2004 2005 2006 2007 20080Source: ECB.In 2008 the total number of euro coins incirculation (i.e. net circulation excluding stocksheld by the NCBs) grew by 7.9% to 82.3 billion,while their value rose by 5.7% to €20.4 billion.The 1 and 2 cent coins accounted for most ofthis increase. The share of the low-value coins,the 1, 2 and 5 cent coins, in the total number ofcoins in circulation remained stable at 59%.BANKNOTE HANDLING BY THE EUROSYSTEMIn 2008 the euro area NCBs issued 34.1 billionbanknotes, while 33.2 billion banknotes werereturned to them. The return frequency 7 ofbanknotes in circulation remained almostunchanged at 2.79, meaning that, on average,a banknote was checked for authenticity andcirculation fitness by the fully automatedbanknote processing machines of the euro areaNCBs around once every four months.Since 2004 the Eurosystem has conductedannual surveys with the aim of monitoring thecondition of euro banknotes in circulation atthe euro area level. In 2008 a trend towards animprovement in the condition of the banknotesin circulation was observed. The condition ofthe banknotes also became more homogeneouswithin the euro area, reflecting the Eurosystem’scoordinated sorting/issuing policies. The NCBsidentified some 5.6 billion banknotes as unfit forcirculation and replaced them accordingly. Theunfit rate, 8 at around 17.0%, remained close tothe rate recorded in the previous year.3.2 BANKNOTE COUNTERFEITING ANDCOUNTERFEIT DETERRENCECOUNTERFEIT EURO BANKNOTESThe total number of counterfeit euro banknotesreceived by National Analysis Centres 9 in 2008was around 666,000 10 , which represented anincrease from the relatively stable levelsobserved in previous years. However, thenumber of genuine banknotes in circulation alsoincreased significantly in 2008. Compared withthe number of genuine euro banknotes incirculation, which reached 13.1 billion by theend of 2008, the quantity of counterfeits is verysmall indeed. Therefore, the probability ofrandomly receiving a counterfeit banknote fromcirculation remains very low. Chart 49 showsthe trend in counterfeits removed fromcirculation, with figures taken at half-yearly7 Defined as the total number of banknotes returned to NCBs ina given period divided by the average number of banknotes incirculation during that period.8 Defined as the number of banknotes identified as unfit in a givenperiod divided by the total number of banknotes sorted duringthat period.9 Centres established in each EU Member State for the initialanalysis of counterfeit euro banknotes at the national level.10 This figure is subject to a very slight correction on account oflate reports, particularly from outside the EU.ECBAnnual Report2008119
Chart 49 Number of counterfeit eurobanknotes recovered from circulationbetween 2002 and 2008(thousands)4003503002502001501005002002 2003 2004 2005 2006 2007 2008400350300250200150100500Chart 50 Distribution of euro banknotecounterfeits by denomination in 2008€5035%€10020%€2005%€5000%€51%€101%Source: ECB.€2038%Source: ECB.Note: The figures have been rounded to the nearest percentagepoint.intervals since the euro banknotes werelaunched. In 2008 the €20 and €50 banknoteswere the counterfeiters’ biggest targets, betweenthem accounting for about three-quarters of thenumber of counterfeits. Chart 50 gives a detailedbreakdown of the distribution of counterfeits interms of volume.The public can remain confident in the securityof the euro: it has proven to be a well-protectedcurrency, in terms of both the sophisticationof its security features and the effectivenessof European and national law enforcementauthorities. However, this confidence shouldnever give rise to complacency, and the ECB’sadvice to the public remains to be alert tothe possibility of fraud and to remember the“feel-look-tilt” test. 11 The Eurosystem continuesto invest considerable effort in ensuring thatboth the public and professional cash handlersare well-informed with regard to the recognitionof counterfeit banknotes.COUNTERFEIT DETERRENCEThe Eurosystem continued in 2008 to workclosely with Europol and the EuropeanCommission (in particular the European Anti-Fraud Office, OLAF) in the fight againstcounterfeiting of the euro. The Eurosystem isactive, both in the EU and beyond, in trainingprofessional cash handlers in the recognitionand handling of counterfeit banknotes.The Eurosystem participates actively in thework of the Central Bank Counterfeit DeterrenceGroup (CBCDG) (a working group of 31 centralbanks and note-printing authorities cooperatingunder the auspices of the G10). The groupsponsors research into techniques designed toprevent the illicit reproduction of banknotes.The ECB hosts the International CounterfeitDeterrence Centre (ICDC), which acts as thetechnical centre for all CBCDG members. Itsmain role is to provide technical support and tooperate a centralised communication systemserving all parties involved in the field ofcounterfeit deterrence systems. The ICDC alsomaintains a public website 12 which providesinformation and guidance concerning thereproduction of banknote images as well as linksto country-specific websites.11 For details, see http://www.ecb.europa.eu/euro/banknotes/security/html/index.en.html12 For details, see http://www.rulesforuse.org120 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
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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
Page 84 and 85: focused more on the production rath
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
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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 118 and 119: ELIGIBLE LINKS BETWEEN NATIONAL SEC
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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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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