makers. the federal reserve ’ s strategies for improving the payment system also aspire to achieve greater end - to - end efficiency in cross - border payments, an historical pain point for end users. in support of this interest, and following an exhaustive season of consultation with industry leaders, we are currently in the midst of a multi - year effort to adopt the iso 20022 payment message formats for the fedwire funds service. this body of work reflects the emergence of iso 20022 as the global standard in payment systems, and seeks to achieve greater efficiency and interoperability in cross border payments for financial institutions and end users. moreover, the structured and robust nature of the iso 20022 message format provides an opportunity to enhance the information content carried in a payment message, including remittance information to support straight through processing of corporate payments, and to promote greater innovation across a common message suite. finally, for both the long term competitiveness of our financial institutions and end users, and for the primacy of the dollar as a global settlement currency, it is imperative that the anchor element of our nation ’ s payment system remains well integrated in an increasingly global marketplace. with detailed planning well underway, by the end of 2017 we expect to announce iso 20022 message format specifications and an implementation timeline. while i recognize that i am speaking principally to an audience of securities professionals, i appreciate your indulgence of these critically important and strategic payment themes, especially given the inter - connectedness and mutual dependencies that exist across payment, clearing, and settlement infrastructures. closer to your world, and as previously mentioned, we migrated the fedwire securities service 3 / 5 bis central bankers'speeches in november 2015 to a new hardware and software platform. this undertaking was, by far, the largest element of the fedwire modernization program and the most significant change to the federal reserve ’ s wholesale services in a generation. if you heard nothing of it, or have subsequently forgotten, that is the greatest affirmation of success. notwithstanding the significance of this accomplishment, the conversion was “ like for like ”, meaning no new service enhancements for customers or in support of policy interests. in parallel to system - wide efforts to advance strategies for improving the payments system, we have therefore embarked on a corresponding set of strategies for improving the fedwire securities service ( sifss ). the formation of these strategies actually commenced before the modernization even concluded in consultation with a range of stakeholders including securities issuers, depository institutions,

too have potential difficulties in operating successfully in a negative interest rate environment. they often provide liabilities – that is, promises of future pension payments or insurance payments – at nominally fixed rates. if they can only invest in negative yield instruments, their profits could be imperiled. such possible profit squeezes could also prompt financial institutions to take on inappropriately risky assets to earn an apparently positive bis central bankers ’ speeches return. these concerns are present to some extent at very low rates, but they are magnified at negative rates of interest, a point made by ben bernanke in his 2004 speech on the topic. 9 a special case in the united states concerns the 2a - 7 money market mutual funds, which are more prevalent in the united states than in europe. money market mutual funds are institutions that offer a floating rate of interest to shareholders that is intended to maintain the value of a share in the fund equal to par, or very close to par, at all times. with negative interest rates, and in the absence of a sponsor that is willing to subsidize shareholders in the fund, such a financial institution would not be able to return a dollar invested today to a shareholder the next day. in such circumstances, the fund must disband, as it has “ broken the buck. ” recent sec reforms specify that prime institutional funds be offered only shares expressed as floating net asset values in 2016, but retail and treasury - only money funds will retain a fixed nav share structure, and therefore will still be subject to this complication in an environment of negative nominal rates. 10 6. signal of deflation another complication centers on the signaling effects i mentioned earlier. when implementing negative rates, central banks recognize that the signaling effects of their action may be unpredictable. the inference drawn by people could be a negative one. for instance, people could infer that the central bank itself has low expectations for inflation and is lowering nominal rates into negative territory as a way to “ ratify ” the low expected inflation environment. such an inference would complicate the central bank ’ s effort to achieve its objective because it could encourage and entrench the public ’ s expectations for deflation. 11 that could complicate the potential exit from the negative rate regime. 7. public acceptance as with all public policies, negative nominal rates must be acceptable to the public if they are to be a useful tool for central banks. certainly, avoiding severely negative rates, especially for retail depositors, would tend