New Developments in Banknote and Currency Management

Transcription

1 The independent world forum for central bankers and financial supervisors Training course/seminar series 2011 New Developments in Banknote and Currency Management 4-day intensive residential programme 4 7 April 2011 Cumberland Lodge, Windsor Course chairman: Bill Melbourn Former Deputy Chief, Department of Banking Operations, Bank of Canada Series adviser: Charles Goodhart, CBE Professor Emeritus London School of Economics Financial Markets Group Hosted by Central Banking Publications

2 Dear Delegate, No central bank function is more visible than currency management. A currency s integrity and efficient supply are unequivocal everyday indicators of a well-functioning central bank. In the eyes of the public, this integral central bank function should be efficient, meet demand and present minimal issues which may damage the reputation of their respective country. In 2010, high profile incidents in the UK and internationally surrounding the printing of banknotes presented a clear reminder if one was needed of how the public relies on consistent banknote and currency provision and how flexible currency management needs to be to deal with unexpected events and threats. Central banks need to look carefully at where inefficiencies can arise and need to be aware of the risks in outsourcing banknote production.however, issuing and destroying cash, maintaining note quality and guarding against counterfeit notes is an increasingly costly and complex business and ill-considered or poorly implemented outsourcing can prove counterproductive. Speaking in early 2010, Victoria Cleland, Head of Notes Division at the Bank of England stated that the Bank of England s role in producing and distributing the banknotes should be achieved with appropriate risk management, efficiency and value for money. These are fundamental principles which central banks should strive to achieve throughout their banknote production lifecycle. Over the four days, our seminar will address these fundamentals with comprehensive sessions and discussion will focus on key challenges and functions including, demand forecasting, maintaining and monitoring fitness standards, public engagement strategies, outsourcing and anti counterfeiting. The elite panel of speakers comprises leading authorities in this field. We are pleased to welcome: Hans de Heij, Cash Policy Department, De Nederlandsche Bank Thomas Schwikart, Head of Currency Management, European Central Bank Tomas Hladek, Executive Director, Cash and Payment Systems, Czech National Bank Alex Jarvis, Former General Manager Printing Works, Sorting and Cash Centres, Bank of England Trond Eklund, Chief Cashier, Norges Bank All discussions are held in roundtable format to encourage participants to share their experiences and debate the pressing issues in their field. Each session allows participants opportunities to question an expert panel of speakers and to benchmark themselves against good practice internationally. This format, as more than 3,000 central bankers and regulators can attest, encourages delegates to quiz panellists, raise issues and discuss solutions to the specific challenges they face. For more information about the programme, please take a few moments to look at the detailed course contents presented on brochure attached. I look forward to welcoming you to Windsor on 4 April. Yours sincerely, Robert Pringle Chairman Central Banking Publications I have attended many workshops for central bankers. Those organised by Central Banking Publications are by far the best A central bank delegate

3 Monday 4 April The Banknote Life-Cycle, Risk Management & Public Engagement Introduction: the currency life-cycle Bill Melbourn Former Deputy Chief, Department of Banking Operations, Bank of Canada New Developments in Banknote and Currency Management Spring 2011 This opening session, led by the chairman, will provide delegates with an overview of key areas of focus for the course, as well as the opportunity to identify specific areas they would like discussion to focus on. In particular, the chairman will provide an overview of the demands placed on banknote and currency management, the organisation of banknote production within central banks, the importance of maximising efficiency as well as analysis into the risks involved when outsourcing production. New challenges in currency management Alex Jarvis Former General Manager Printing Works, Sorting and Cash Centres, Bank of England What are the new challenges facing currency managers in central banks? The speaker, a former head of printing works at the Bank of England, will lead a discussion on risk management, policy concerns and new developments across the broad range of activities that constitute the currency management function. The main focus will be on the challenges involved in outsourcing. Delegates will be asked to comment on outsourcing practices within their home countries. Contingency and interruption planning Break out sessions facilitated by Alex Jarvis and Bill Melbourn In 2010 no central bank is unaware of the requirement that all key business areas be included in effective contingency plans. This session will draw on the experiences of the group in the area of contingency planning and operational risk management. Participants will consider a variety of scenarios that explore the key challenges central banks face in this area and how they are tackling them. Talking money: the public and banknotes Sonja Danburg Senior Financial Analyst Board of Governors of the Federal Reserve System (invited) The issuing of banknotes remains a core task for any central bank. Ensuring the integrity of banknote production and distribution requires effective communication with a number of key stakeholders, the main being the general public. In addition, central banks must ensure lines of communication are held with specialised target groups including cashiers, retailers and cash in transit companies. In this session, led by a leading communication specialist, delegates will discuss innovative methods to raise public awareness of new security measures integrated within banknotes. Delegates will also provide insights from their home countries on the practicalities of rolling out a national campaign that reaches their jurisdictions entire population in relation to new developments in their banknotes. The conference has proven most useful... sharing of views and experiences was embraced and will prove invaluable. A central bank delegate

4 Tuesday 5 April Demand Forecasting, Fitness Standards, Sorting and Distribution Forecasting the demand for banknotes Thomas Schweikart Head of Currency Management Division, European Central Bank The long lead times involved in banknote production make it vital from a cost and reputational point of view that central banks forecast the demand for banknotes as accurately as possible. Indeed, the benefits of accurate forecasting are obvious: more efficient procurement and reduced stockholding costs. Yet building a model that forecasts five years ahead is far from straightforward for any policy function. The demand for banknotes is no exception to this. Combining inflation forecasts, growth forecasts as well as historical data on currency deposits, withdrawals and replacement rates offers insights and, in this session, the speaker, a leading authority from the European Central Bank, will discuss the latest thinking on how to produce useful and accurate forecasts. Fitness standards and key aspects of note sorting and processing Alan Gerard Managing Director, AG1800 Consultants (invited) Whether sorting is carried out in-house or outsourced, central banks must ensure fitness standards for currency in circulation are set, monitored and maintained. The proliferation of ATMs has had a significant impact and sharpened the focus on fitness standards for both commercial and central banks. In this session discussion will focus on methods to monitor fitness standards and how to address the key challenges central banks face in the sorting and processing of banknotes. Discussion will also focus on new and existing technology which can improve the efficiency of banknote sorting. Distributing cash from multiple vaults and locations Tomas Hladek Executive Director, Cash and Payment Systems, Czech National Bank The arguments for and against managing vaults and cash in multiple locations are well known. While maintaining several sites can incur significant costs, it also brings benefits such as reduced transportation costs, as well as risks. The decision will depend on a number of factors including the involvement of the banking sector, geography, banknote production, security and needs and habits of the public. Models for cash circulation and processing must also be considered closely in order to ensure demand is met. In this session the speaker, a senior manager from a central bank that manages vaults and cash at multiple locations, will provide practical insights into how best to approach cash distribution. Consideration of disaster situations will figure in the calculation, and the speaker will illustrate lessons that can be learnt for central bankers drawing on first-hand experience. Value for money: working with external suppliers Speaker from the Bank of England to be confirmed Central banks that outsource some or all of their currency production must, nonetheless, monitor production and quality standards. Procurement from external suppliers is expensive (one of, if not the, most expensive items in a central bank s budget) and complex. Currency managers must weigh up the importance of price against considerations such as time of delivery and quality of product. Following the sale of the Bank of England s printing operations in March 2003, the Bank now relies entirely on external supply for the United Kingdom s banknote needs. This session examines the Bank s experiences in this area and considers general rules for best practice in banknote procurement. Outsourcing cash processing functions: the case of Norway Trond Eklund Director, Chief Cashier s Department, Norges Bank Norges Bank has been at the forefront of successful outsourcing of cash-processing functions, using third-party operators to print, store, process and, uniquely, destroy its notes. As a long mountainous country this terrain finds distribution to cash quite challenging. Moreover, defining incentives for cash sorting needs special attention so that the quality of banknotes in circulation is maintained. The speaker, from Norway s central bank, discusses how its approach was developed and is managed at present, and examines the lessons to be learnt from this successful example of outsourcing.

5 Wednesday 6 April New Directions In Banknote Design Banknote designs: comparison and appraisal Hans de Heij Cash Policy Department, De Nederlandsche Bank New Developments in Banknote and Currency Management Spring 2011 For currency managers, note design brings together the full range of constituencies and stakeholders that they interact with. New designs must win public and political acceptance, incorporate requisite security features, and meet durability and machine processing standards. Currency managers must have a clear understanding of these concerns, and excellent project management skills. In this session the speaker draws on work at the Dutch central bank to ensure effective cooperation between all stakeholders in the design and production process to critique recent issues and designs. This includes the use of market surveys to gain feedback from the public. Note workshop Participant presentations, moderated by Bill Melbourn In this session, participants will be divided into small groups and to consider key elements in banknote design and production. The session will also showcase short presentations from participants discussing new features in banknotes or new developments in processing. Case study: The success of Bermuda s $2 Note Marcia Woolridge-Allwood Director, Corporate and Finance, Bermuda Monetary Authority (invited) The international banknote society (INBS) has named Bermuda s $2 note as banknote of the year for The note was praised for its array of security features including embedded metallic thread, a distinctive watermark and a latent image of the note denomination. In this session the speaker, a banknote specialist from the Bermuda Monetary Authority, will discuss the challenges experienced in producing the banknote with a printer based overseas, the security features of the note and lessons that can be learnt for central banks. About the course chairman Bill Melbourn retired from the Bank of Canada in 1996 where he was engaged in all aspects of bank note policy for 20 years. From 1996 to 2003, he consulted in Europe, Africa and South America. During his career at the central bank and as a consultant, Mr Melbourn was involved in projects concerning most aspects of bank note management these have ranged from production issues such as quality control of new notes received from the printer to the central bank, operational issues related to note processing and outsourcing options. He attended Pacific Rim Banknote Printers Conferences and Four Nations meetings as part of the Bank of Canada delegation, and represented the Bank on the Intaglio Research Group which he chaired from and the SSG2, the precursor to the Central Bank Counterfeit Deterrence Group.

6 Thursday 7 April Safeguarding value Security features against counterfeiting Karel Schell Director, Schell Consulting BV The advent of photography in 1834 spelled the end for black-and-white security features printed in letterpress with unique type as effective deterrents against counterfeit. Then the response was to print notes in colour. Advances in image-reproduction technology and the development of security features are recurring themes in the arms race with counterfeiters. How can central banks stay ahead? This session will discuss security features for the general public and professional cash handlers as well as features for forensic analysis. Cooperation: strengthening defences in the fight against counterfeiting Speaker to be confirmed Whether it is the casual desktop counterfeiter or the organised-crime supported forger, experience shows that it is vitally important that central banks, regulators and enforcement agencies cooperate closely in order to stop counterfeiting at its source and prosecute those responsible. The G10 have encouraged cooperation across jurisdictions through its ever present Central Bank Counterfeit Deterrence Group (CBCDG) who maintain a counterfeit deterrence system for those involved in anti counterfeiting, including the public. In this session the speaker will provide insights into the importance of cooperation in the fight against counterfeiters. Discussion will focus on best practices in relation to cooperating in the fight against counterfeiting across jurisdictions. Lessons and key issues Wrap-up discussion and action points led by Bill Melbourn This session draws together the themes of the course and focuses on key ideas and conclusions. Delegates will reflect on lessons learnt throughout the course and identify opportunities for moving forward, in their own organisations. The group will review the challenges identified as most pressing and discuss together the most effective possible solutions presented. Standing ovation for the idea of the conference, its venue and organisation. A central bank delegate CBP training course/seminar series, Spring 2011: Strategic Planning and Change Management for Central Banks Financial Stability: Designing and Implementing Macroprudential Policy Central Bank Governance: the Role of the Board Current Challenges and the Future of Central Bank Statistics Effective Internal Audit for Central Banks How to Implement a Risk-Based Framework to AML and CFT For detailed programmes and a fax-back registration form for each of these key courses, please visit:

7 Booking details Course fee: 2,800 (VAT at 0% for delegates employed by government in furtherance of its sovereign activities) 4 day (3 nights) residential course Course fee includes: en-suite accommodation, meals, refreshments, course documentation and a complimentary copy of the most recent issue of the Central Banking journal. Substitute delegates can be accepted should the registered delegate be unable to attend; please let us know prior to the event. How to book Please complete and return the registration form overleaf to: Central Banking Publications Ltd. Incisive Media Haymarket House Haymarket London SW1Y 4RX UK telephone: +44 (0) fax: +44 (0) [email protected] website: The venue Cumberland Lodge is one of the Royal Houses in The Great Park at Windsor and was formerly used by members of the Royal family and their households. Occupying a superb position, it provides a unique setting for conferences where participants find they can work easily in tranquil and gracious surroundings. Most bedrooms are spacious and each has its own en-suite bathroom. About Central Banking Publications Central Banking Publications events division is the leading independent organiser of public policy seminars/training courses for the official sector. Since 1997, CBP has hosted roundtable seminars and training courses for over 3,000 senior policymakers from central banks, ministries of finance and financial regulatory agencies around the world. Senior officials from more than 120 countries have attended these meetings over the past ten years.

8 Registration for New Developments in Banknote and Currency Management 1. Delegate details: PLEASE WRITE IN CAPITALS Mr/Mrs/Ms: First name: Job title: Organisation: Address: Telephone: Facsimile: 1: 2: Surname/Family name: Postcode: Please provide us with the direct address of the delegate and an additional address if possible. This is very important because all correspondence with delegates is by . Course fee: 2,800 (VAT at 0% for delegates employed by government in furtherance of its sovereign activities) 2. Payment details: Bank transfer: The Royal Bank of Scotland, 62/63 Threadneedle Street, London, EC2R 8LA, UK A/c No: Sort Code: IBAN: GB89 RBOS Swift code: RBOSGB2L Please pay the course fee net of all bank charges and send us the copy of the transfer details Credit card: please charge to my Visa Mastercard American Express Card No: Cardholder name: Cardholder address (if different from above): Security Code: Expiry date: Signature: Cheque: I enclose a cheque for Date: payable to Central Banking Publications Ltd. I will require accommodation from I have read and agree to the terms and conditions below. to Signature: Date: Terms & Conditions: A refund (less 10% administration fee) will be made if notice of cancellation is received in writing three weeks before the conference. Regrettably, no refunds will be available for cancellations received less than three weeks before the event start date. If you do not attend the event or notify us of your intention to cancel, the full fee will still be payable. A substitute delegate is welcome but the organiser must be notified in advance of the conference to avoid incurring a charge. Substitutions may not be made at the conference. Payment must be received before the event start date. If we have not received payment in full by the event start date, you will be required to provide a credit card guarantee on the day to gain entry. The programme may change due to unforeseen circumstances, and Incisive Media reserves the right to alter the venue and/or speakers. Incisive Media accepts no responsibility for any loss or damage to property belonging to, nor for any personal injury incurred by, attendees at our conferences, whether within the conference venue or otherwise. Data Protection: By registering for a Central Banking training course you will receive further information relating to this event. In addition we will send you information about our other relevant products and services which we believe will be of interest to you. If you do not wish to receive other relevant information from Incisive Media via a particular medium please click the following relevant boxes: mail phone fax . Incisive Media will also allow carefully selected third parties to contact you about their products and services. If you do not wish to receive information from third parties via any of the following media please tick the relevant boxes: mail phone. Please tick if you are happy to receive relevant information from carefully selected third parties by and fax. Registered Office Haymarket House, Haymarket, London, SW1Y 4RX UK. Registered in England and Wales number VAT No. GB P.