frank elderson : 2014 pin agreement – incentive for socially efficient and innovative payments speech by mr frank elderson, executive director of the netherlands bank, on the occasion of the signing of further agreement ii ( “ the pin agreement 2014 ” ), the hague, ministry of finance, 3 september 2014. * * * your excellency, ladies and gentlemen, pin agreement 2014 crowning glory of cooperation of market parties as chairman of the national forum on the payment system, i am very pleased about the further agreement ii that was signed just now. this agreement, also known as the pin agreement, is an up - to - date adaptation of the objectives stated in the original covenant dating back to 2005. that meaningful covenant at the time paved the way for banks and joint retailers to encourage consumers to use their debit cards in order to reduce the social costs of the payment system. because, as we all know, cash is expensive. that said, i would like to stress here that banknotes and coins will continue to play an essential role in payment transfers, and will therefore continue to be at everyone ’ s disposal. the 2005 covenant cleared the air between the market participants. this was urgently required following the heated debate about the social costs and revenues of payments, and the question where these end up. the mutual understanding that cooperation and trust pays off was at the root of a series of measures to promote debit card use. and not without results. the sectors not keeping pace with the introduction of payment terminals have since also started using them, and smaller amounts can now be paid by debit card virtually everywhere. yet more debit card payments and today the era of the 2014 pin agreement has started. one billion extra debit card payments should definitely be feasible by 2018. this would bring the total to 3. 7 billion, and would surpass the number of cash payments at the till. the foundation for the promotion of efficient payments has proved that it is very capable of producing tangible plans to achieve this. progress in minimising disturbances in payments systems but users of course think that electronic payment systems should always work. that is a bit much to ask as it is simply inherently unachievable. for that matter, the market participants represented in the national forum on the payment system have made great efforts to further increase the robustness and safety of payments transfers, partly in response to last year ’ s repeated disturbances of payment systems. for instance, almost the entire pin chain has a fall - back facility. bis

depth for the on - therun 10 - year treasury security dropped to about 10 percent of its previous level, and daily volumes spiked to more than $ 1. 2 trillion at one point, roughly four standard deviations above the 2019 average daily trading volume. stresses were also evident in a breakdown of the usually tight link between treasury cash and futures prices, with the treasury cash – futures basis — the difference between prices of treasury futures contracts and prices of treasury cash securities eligible for delivery into those futures contracts — widening notably. selling pressures were widespread, reflecting sales by foreign official institutions, rebalancing by asset managers, a rapid unwinding of levered positions, and precautionary liquidity raising. available data suggest that foreign institutions liquidated about $ 400 billion in treasury securities in march, with more than half from official institutions and the remainder from private foreign investors, at a time when offshore dollar funding markets also experienced acute stress. domestic mutual funds sold about $ 200 billion during the first quarter, selling their - 6less - liquid treasury securities in order to raise cash to meet investor redemptions. hedge funds reduced long cash treasury positions by an estimated $ 35 billion. 6 dealers play a central role in the treasury market by buying and selling securities and providing financing to investors. their capacity or willingness to intermediate these flows was strained amid the elevated uncertainty and intense and widespread selling pressure in midmarch. operational adjustments associated with the rapid move to remote work may also have inhibited intermediation. the acute stresses in the treasury market necessitated emergency intervention by the federal reserve at an unprecedented scale. the federal open market committee authorized purchases of treasury securities and agency mortgage - backed securities ( mbs ) “ in the amounts needed ” to support smooth market functioning of these markets. 7 between march 12 and april 15, the federal reserve increased its holdings of treasury securities by about $ 1. 2 trillion and agency mbs by about $ 200 billion. the federal reserve provided overnight and term repurchase agreement ( repo ) operations to address disruptions in treasury financing markets. these actions rapidly restored market functioning, and a variety of indicators had returned to pre - covid levels by the summer. 8 while the scale and speed of flows associated with the covid shock are likely pretty far out in the tail of the probability distribution, the crisis highlighted vulnerabilities in the critically important treasury market that warrant careful analysis. a number of possible reforms have see board of governors of the federal reserve system ( 2020 )