, combined with the fact that many connected participants can update the shared ledger, means that end - point security is another critical component of any successful implementation of the technology. adverse actors that can take over a participant ’ s access to the ledger remains a key security concern, as thefts of cryptographic keys in bitcoin continue to demonstrate. thus, advances in cryptography will remain a key priority to enable widespread adoption of distributed ledger technologies, along with systems for securing private keys, the management of access to private keys, and differentiated permissions for participants in the system to read and write to the ledger. recent episodes have illustrated the importance of having protocols agreed at the outset to determine whether and under what circumstances to reverse transactions once they have been recorded in a distributed master ledger. finally, it will be important that users and administrators of distributed ledger technologies can meet their responsibilities to combat money laundering, terrorist financing, and other key law enforcement concerns. some of the new technologies would potentially allow authorized access to certain data records in a much more efficient manner than has previously been possible. for example, distributed ledgers could be developed to collect personally identifiable information and 3 / 4 bis central bankers'speeches country identifiers that enable banks to identify and report on suspicious activity. it will be important that these new technological developments and their implementation perform in a safe and sound manner that is transparent and satisfies regulatory requirements. while prevention will remain the preferred approach, realistically, resiliency and recovery will also need to be high - priorities. indeed, many firms have suggested that the distributed data storage concept has the potential to increase the level of resiliency and data integrity. the basic idea is it should be harder to corrupt multiple copies of the same data simultaneously such that digital ledgers could reduce the vulnerability associated with a single point of failure. we must press firms and experts to identify the strengths and vulnerabilities of this concept, even as we all look for ways to make databases more secure and resilient. in an interesting development, some financial institutions have also begun to consider using distributed ledgers to back up critical databases and enable quick recovery from potentially virulent cyberattacks. we will be interested in whether such techniques can make new contributions to cybersecurity. overall, the public needs to have confidence that any system employing distributed ledgers will operate properly, particularly in stressed conditions, and know that when adverse scenarios do occur, there will be robust management and governance to respond effectively

mark w olson : update on the us economy remarks by mr mark w olson, member of the board of governors of the us federal reserve system, at the university of arkansas at little rock, little rock, arkansas, 13 april 2006. * * * recent trends in the u. s. economy have been, on the whole, quite favorable. real gross domestic product ( gdp ) increased 3 - 1 / 4 percent during 2005, on the heels of two years during which it rose at an annual rate of almost 4 percent. by the end of last year, businesses had added another 2 million jobs to their payrolls, and the unemployment rate had dropped to its lowest level in five years. although top - line consumer price inflation was boosted by the run - up in energy prices, core consumer price inflation remained relatively steady, at about 2 percent for the year. one of the significant challenges for a policymaker is to be able to discern the underlying trends in real activity and inflation in the midst of the inevitable noise and shocks that come along. the recent period has presented a number of those types of unanticipated events : most notably, the devastating hurricanes that hit the gulf coast last fall destroyed residential and business capital and tragically uprooted the lives of many people. the resulting disruptions to economic activity, particularly in the energy and petrochemical sectors, held down the rise in real gdp in the fourth quarter. the restarting and rebuilding that began late last year should be providing a boost to activity this year, but the size of that effect and the extent to which it will be distributed in coming quarters remain uncertain. another special factor at work early this year was the atypically warm weather that very likely advanced homebuilding and perhaps other spending that might otherwise have stretched into the spring. as a result, most forecasters believe that the incoming information has been adding up to a sizable, but quite likely temporary, acceleration in real gdp in the first quarter after the small increase in the final quarter of 2005. another, more persistent economic challenge in recent years has been the climb in world oil prices. as a result, last year marked a third consecutive year of rapidly rising - - and sometimes volatile - - domestic energy costs. to be sure, higher energy prices cut into households'purchasing power and the profits of non - energy firms. while recognizing the difficulty of identifying the reactions of consumers and businesses to higher energy prices, chairman bernanke has recently noted that the surge in energy