Dear Delegate,

“…research results show that people trust that central banks issue safe banknotes and, probably as a consequence thereof, hardly check them.”
European Central Bank Monthly Bulletin October 2007

Such an observation may, on the surface, appear flattering, but should worry currency managers.

In the eyes of the public, 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.

However, issuing and destroying cash, maintaining note quality and guarding against counterfeit notes is an increasingly costly – and complex – business. Central banks need to keep up with the latest technological developments to combat sophisticated forgers.

Yet, alongside note printing and procurement, cash distribution (often requiring a large branch network) is often first in line for scrutiny when cost savings are needed. However, ill-considered or poorly implemented outsourcing can prove counterproductive.

This seminar has been designed to assist central banks in taking a strategic approach to their currency management and to help them address current risks and threats.

The seminar contains a series of case studies drawn from recent experience which illustrate the key practical lessons for central banks wishing to modernise cash production, processing and distribution arrangements.

The expert panel of speakers course includes: Andrew Bailey, Chief Cashier, Bank of England; Prabir K. Biswas, Former Executive Director, Reserve Bank of India; Trond Eklund, Chief Cashier’s Department, Norges Bank; Roland Tornare, Head of Cash, Swiss National Bank; and Aboobaker Ismail, Head, Currency & Protection Services, South African Reserve Bank

The aim of this course is to provide a forum for central bank currency managers to review together best practice regarding all elements of the banknote life-cycle, with an emphasis on how specific national situations require tailored solutions.

Since 1999, over 1,400 central bankers and supervisors have attended roundtable seminars hosted by Central Banking Publications Ltd.

I look forward to welcoming you to Windsor.

Yours sincerely,

Robert Pringle
Managing Director, Central Banking Publications

Sunday, 30th March

Registration
Welcoming Dinner

Monday 31st March

Implementing a life-cycle approach
Bill Melbourn
Former Deputy Chief, Department of Banking Operations, Bank of Canada

This introductory session examines how central banks can take a holistic view of their currency mandate by looking across the currency life-cycle. This means understanding the roles and functions of all major stakeholders, both within the central bank and externally (the cash-in-transit industry, commercial banks, other large commercial users and the police). This session will introduce the main themes to be covered over the four days and participants will be offered the opportunity to express their main areas of interest for discussion during the course.

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 policy concerns and new developments across the broad range of activities that constitute the currency management function.

Determining banknote denominations, the note-coin boundary and seigniorage
Workshop led by Alex Jarvis
Which denominations should the central bank issue and what should it take into account when considering this? Where should the line between notes and coins be drawn? How can the central bank calculate seigniorage revenue? This session, in the form of a workshop, will look at three defining aspects of currency management.

Towards a strategic plan for currency management
Prabir K. Biswas
Former Executive Director, Reserve Bank of India (invited)

A strategic plan for currency management means linking each central bank activity with the overall operations in the banking system and integrating currency risk management within the overall risk management structure. The speaker, a former executive director at India’s central bank, will discuss how it has met challenges it faced in dealing with one of the world’s largest note circulations.

Value for money: working with external suppliers
Andrew Bailey
Chief Cashier, Bank of England

Central banks which 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 of 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.

Tuesday, 1st April

Design, Production and Distribution
Chairman: Bill Melbourn

Introducing a new note series: the Swiss case
Roland Tornare
Head of Cash, Swiss National Bank

Issuing a new note series presents represents a huge project management and logistical challenge. At the beginning of 2005, the Swiss National Bank launched a competition for the artistic design of the new banknote series. The central bank anticipates having one of the six denominations at technical production levels this summer. This session, in the form of a case-study, looks at the developments of the notes and highlights how the central bank is tackling the challenges faced in designing and introducing this new series.

Key elements in banknote design
Hans de Heij
Cash Policy Department, De Nederlandsche Bank

For currency managers, note design presents a series of interlocking challenges. New designs must win public 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. The speaker draws on work at the Dutch central bank to ensure effective cooperation between all stakeholders in the design and production process. This includes the use of market surveys to gain feedback from the public.

Note sorting and processing
Niels Riedel
European Central Bank

This session will address issues when selecting the appropriate technology for note sorting to meet specific needs, from semi-automated; medium and high-speed systems. particular attention will be paid to logistical questions and practical considerations to arrive at the most efficient arrangement for both speed and security.

Case-study: Norway’s approach to cash distribution
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 destroy Norwegian notes. In this session, the speaker from Norway’s central bank discusses how their approach was developed and is managed at present, and examines the lessons to be learnt from this successful example of outsourcing.

Wednesday, 2nd April

Demand Forecasting and Fitness Standards
Chairman: Bill Melbourn

Forecasting the demand for banknotes
Richard Wall
Director, Currency Operations, Bank of Canada

Strategic management of currency is impossible without accurate forecasts of the demand for banknotes. Long lead times in banknote production make it essential for central banks to be able to model banknote demand (at least) five years into the future. Currency demand models must draw on interest, inflation and growth forecasts, and also incorporate historical data on currency deposits/withdrawals and replacement rates. Good forecasting allows more efficient procurement and reduced stockholding costs. This session examines best practice in banknote forecasting, drawing on the experience of the Bank of Canada.

Fitness standards and note processing
Richard Wall

Whether currency sorting is carried out in-house or outsourced, fitness standards for currency in circulation must be set and monitored. The proliferation of ATMs has had a considerable impact and sharpened the focus for both commercial and central banks. Group discussions here will focus on ways of setting, monitoring and maintaining fitness levels for currency in circulation.

Workshop: questions of demand and quality
Breakout session moderated by Bill Melbourn

This workshop builds on the topics covered earlier in the day to address the major topics and issues raised in the discussion of fitness standards and forecasting demand.

Thursday, 3rd April

New Challenges: Threats and Communication
Chairman: Bill Melbourn

Effective anti-counterfeiting measures
Francois Veldeman
Printing Department, National Bank of Belgium (invited)

Research and development is at the heart of the central bank’s arms race with counterfeiters. Over time, new technology and new counterfeiting techniques tend to undermine new security features, meaning that central banks need to be vigilant and forward-looking in order to maintain their advantage. At the core of international efforts against counterfeiting is the G10’s Central Bank Counterfeit Deterrence Group (CBCDG). This session draws on the recent work of the CBCDG and its 27 member central banks and note printing authorities to look at how central banks can maintain their R&D edge, and what future developments in this area are likely to be.

Talking money
Aboobaker Ismail
Head, Currency & Protection Services, South African Reserve Bank

Ensuring the integrity of the banknotes requires effective communication. This has to be directed at specialised user groups such as cashiers, retailers and cash-in-transit companies, as well as at the general public. A variety of media are available to the central bank, and discussion will focus on the various ways to raise awareness of banknote security features and how to roll out a campaign that reaches the entire population.

Lessons and key issues
Wrap-up discussion and action points led by Bill Melbourn

This session will bring together the different themes of the course and focus on key ideas and conclusions. Delegates will reflect on lessons learnt throughout the course and identify opportunities for moving forward, both in their own organisations and at the international level. The group will review the challenges identified as most pressing and discuss together the most effective possible solutions presented.