The European Union has its own electronic money trial, the Cafe project. They should also make sure statistics on their use are collected.It is the other category of electronic money that worries people like Mr Lewis more. That is straight banking on the Internet - not so much going on-line to access your normal bank account as the development of new banking activities.A cursory search of the World Wide Web reveals at least a dozen cyber- banks, sporting names such as DigiCash, NetChex and the First Virtual Holding Company. The European working party has concluded only authorised credit institutions should be allowed to issue electronic purses, and that central banks should scrutinise the security features of the cards. Technical changes such as cash machines and cash-back have changed this velocity dramatically, anyway. It is not something that causes central bankers to lose sleep.The chief worry about electronic purses is their security. Just like debit cards, they have no particular consequences for monetary policy beyond the fact that they might change the proportion of cash people use in their spending - in other words, the velocity of circulation of narrow money.

It is a smart card with extra bells and whistles that allow money from a bank account to be transferred to the card and subsequently drawn on for small transactions. In effect it is like a telephone card except that it can be used for making a wide variety of payments.The electronic purse is therefore much like a debit card, and is designed to save using cash in low-value transactions. Appropriate because the aspect of the Net that could turn out to be most vexing for the Bank, and other central banks, is the development of electronic money. A working party set up by Europe's monetary authorities is looking into the implications of cyber-transactions . One City of London economist thinks these implications could turn out to be grave. Stephen Lewis, at the London Bond Broking Company, says: "If a large proportion of transactions in the economy were to migrate from traditional banking channels to the information superhighway, there would be a clear threat to law enforcement and to the financial foundations of government.

Ordered society might be imperilled."This is strong stuff, so it is well worth exploring electronic money in some detail There are two main categories to think about One, the better established, is the electronic purse Mondex is probably the best- known example. The deal is seen as enhancing earnings by up to 15 per cent next year and the lowly-rated shares rose 4p to 77p.. When the Bank of England set up its home page on the World Wide Web three months ago, the first e-mail it received came from an Internet surfer in California. The inquirer had, appropriately, a question about the concept of legal tender. Broker Shaw & Co thinks this is not reflected in a market value of pounds 12m, an excellent play on one of the fastest growing sectors of the booming Irish economy.r Engineer Widney is splashing out pounds 1.7m on Palcon, which designs, makes and installs control panels for heating, ventilation and air conditioning systems. The Dublin-based telecommunications group has been riding high since floating on AIM at 72p in April.

Recent interconnection deals with AT&T and an affiliate of US Cable Corporation, one of America's largest cable operators, mean Stentor can now offer value- added services not available on rival networks such as Telecom Eireann. The former closed up 27p at 196.5p, while the bidder finished 8p weaker at 361p. Ascot is expected to launch a 230p per share offer this morning.Epic Multimedia continued its good run this week, notching up another 7p to close at 85p.TAKING STOCKr Stentor fell 14p to 171p. The shares were the best performers in the Footsie, adding 19p to 1714p after rival Polygram produced better- than-expected figures Lloyds TSB, reporting tomorrow, retreated 4.5p to 328.5p. Analysts at Lehman Brothers think the figures should underline the strength of the enlarged banking group even before merger savings begin to accrue.Preliminary results from security and emergency lighting group Menvier- Swain were well received with the shares adding 25p to 270p and UBS reiterating its positive stance.Mini-conglomerate Suter, led by David Abell, confirmed earlier market speculation that it was in talks with Ascot Holdings, formerly Nazmu Virani's Control Securities. The partly- paid shares, which were oversubscribed two weeks ago, were firm at 97p.Buyers returned to Thorn EMI after Tuesday's disappointing first-quarter results from its music division.