the long and opaque intermediation chains associated with current methods of correspondent banking are promising potential benefits of the technology. reducing intermediation steps in cross - border payments may help decrease time, costs, and counterparty risks and may materially diminish opacity, for instance by enabling small businesses or households remitting payments across borders to see the associated transfer costs and processing times up front. in trade finance, where document - intensive processes are not fully automated, distributed ledger technology may be able to reduce significant costs and speed up processing associated with issuing and tracking letters of credit and associated documents. to see the full potential of this technology realized for cross - border payments, it will be important to identify and track identities associated with the transactions, which in itself may be facilitated by the use of distributed ledgers, depending on their design. 1 / 4 bis central bankers'speeches in securities markets, the industry is exploring activities ranging from the issuance of securities on a distributed ledger, to the clearing and settlement of trades, to tracking and administering corporate actions. for securities clearing and settlement in particular, the potential shift to one master record shared “ simultaneously ” among users of a distributed ledger - based system could be compelling. sharing one immutable record may have the potential to reduce or even eliminate the need for the reconciliation of multiple records linked to a single trade among and between dealers and other organizations. in concept, such technology could lead to greater transparency, reduced costs, and faster settlement. likewise, distributed ledgers may improve collateral management by improving the tracking of ownership and transactions. nonetheless, as is frequently true in the complex arena of payments, clearing, and settlement, we can also expect that practical details covering a host of technical, business, and market issues will have an important role in determining how new technologies ultimately perform. for commodities and derivatives, there are projects to streamline some of the more antiquated corners of the markets. in markets that are heavily paper - based and lack any central means for coordination, distributed ledger technology could potentially be leveraged to provide coordination that facilitates exchange, clearing, and settlement of obligations. a related development is the potential coupling of distributed ledger protocols with self - execution and possibly self - enforcement of contractual clauses, using so - called “ smart contracts. ” to take a familiar example, for a corporate bond with a specified par value, tenor, and coupon payment stream, a smart contract would automatically execute payments on the specified schedule to the assigned owner over

is uncertain, as it is entirely data - dependent and may change over time. our future actions will take into account these past decisions and their transmission lag to activity and inflation. and, of course, future decisions will be conditioned by the inflation outlook, including the economic prospects and, therefore, the higher probability of a recession that we are currently observing. why did the ecb engage in asset purchases and tltros? to understand the next steps in our normalisation of monetary policy to combat inflation, it is helpful to step back for a moment and consider briefly how we arrived at the current monetary policy situation, characterised by a historically large eurosystem balance sheet. over the past 15 years, the euro area has been hit by a series of major recessionary shocks. first, in 2008 - 2009, we endured the great financial crisis. second, as that crisis drove up public debt levels, several euro area countries were hit by a sovereign debt crisis. recovery from those two major recessions was a slow process, and the euro area economy was only just beginning to return to normality in 2020 when the covid - 19 pandemic caused a worldwide economic shutdown. the main conventional tool in central banks ’ policy toolkit are short - term policy interest rates. but following the sequence of huge negative shocks that have buffeted europe and the rest of the world in recent years, interest rate cuts alone were insufficient for economic stabilisation, as the central bank cannot push its policy rates much below zero. 5 this was the conundrum facing the ecb around 2015. it had lowered its dfr all the way to zero and had even begun to reduce it further, reaching an annual interest rate of - 0. 2 % in late 2014. but even at these very low interest rates, the economy remained sluggish, and inflation stayed persistently below the ecb ’ s target ( at the time, an inflation rate below, but close to, 2 % ), even falling occasionally into negative territory. in these circumstances, the ecb had to reach for new, “ unconventional ” tools to meet its inflation target. in particular, the ecb initiated a rapid expansion of its balance sheet, both by way o f illustratio n, in the latest sma, the median respo ndent anticipated that the dfr wo uld reach 2. 5 % in the seco nd quarter o f 2023. while the central bank can set any interbank