. for example, we are investigating a waterfall functionality which would allow users to receive payments in digital euro above the holding limit by linking a digital euro account to a commercial bank account. the waterfall approach is a way of managing end users ’ retail cbdc holdings via the automated conversion of retail cbdc in excess of a holding threshold into a bank deposit held in a linked commercial bank account chosen by the end user. see the digital euro glossary. holding limits could also be differentiated by type of user, to account for the payment needs of citizens typically on the payer side and businesses that will mainly be on the receiving end of digital euro payments. 20. panetta, f. ( 2022 ), “ more than an intellectual game : exploring the monetary policy and financial stability implications of central bank digital currencies ”, speech at the iese business school banking initiative conference on technology and finance, frankfurt am main, 8 april. 21. broad engagement with market stakeholders will ensure that a digital euro meets users ’ needs. a relevant set of initiatives have been put in place, including market contact groups, surveys and calls for expression of interest on the technical design features of a digital euro. ecb experts are also exchanging views on a digital euro with representatives from european civil society organisations and academia. see the ecb ’ s statement on stakeholder engagement.

that the introduction of the negative interest rate policy has been effective in making the signalling channel, which is implicit in our forward guidance, more compelling and credible. 2 / 5 bis central bankers'speeches importantly, in order to anchor short and medium - term interest rates at levels that are close to the lower bound, this portion of the curve had to be insulated from flows of news that otherwise would have entailed an unwarranted change in the monetary policy stance. the conceptual basis for this is exactly the same as the one that, in ordinary times, justifies the tight control that central banks exert on the overnight rate. ordinarily, the central bank “ targets ” the overnight interest rate, which implies that it seeks to protect that rate from shocks – say, originating in the interbank market for liquidity or elsewhere – that, if not offset, would nudge the monetary policy stance in directions that would not be appropriate, given the state of the economy. as i said before, in unconventional monetary policy times, as the overnight rate becomes increasingly constrained to the downside, the notion of the “ operating target ” is generalised to encompass a whole range of interest rates with longer maturities. consequently, insulating those interest rates, to the extent possible, from the impact of external surprises that should not alter the stance becomes an important precondition for a successful reflation strategy. in this regard, over the past three years one could say that we have been effective in shielding short - to - medium term interest rates from shocks that could have weakened the stimulus that the euro area needed to consolidate the recovery ( see chart 2 ). anchoring the short and intermediate segments of the yield curve around levels consistent with a very accommodative monetary policy stance has been even more critical for us at the ecb than for other central banks engaging in similar policies. the reason for this reflects the unique structure of the euro area ’ s monetary policy transmission mechanism. compared with the united states, for example, transmission in the euro area is much more reliant on banks. and short - tomedium term rates are very important benchmarks that euro area banks use for pricing loans, notably to non - financial corporations. one way to see the connection between euro area credit markets and different segments of the yield curve in the euro area is to look at the interest rate fixation periods for loans to non - financial corporations and households ( see chart 3 ). interest rates on loans to