Counterfeiting and Metrics – the Debate Continues

In the December issue of Currency News™ I wrote on whether note issuers are keeping ahead of the counterfeits, with an update on the latest counterfeiting data, using as one of the data points the ppm metric (parts per million, ie. the number of counterfeits detected versus the number of genuine notes in circulation). The following month, Duncan Reid wrote about the shortcomings of the ppm as a metric. It is great that the topic has raised debate, and Duncan’s article provides the few interesting viewpoints, which Currency News has invited me to comment on.

I fully agree that ppm as a metric has shortcomings to which I also referred in my December article. Because of these shortcomings, the counterfeit experts at the European Central Bank (ECB) were not satisfied with its use as a metric in the early days of euro banknotes, and we tried to find another one. Therefore, we asked the ECB’s statisticians to develop a metric which would better represent the transactional use of euro banknotes, to which the number of counterfeits could then be proportioned.