miroslav singer : czech central bank head sees lowered risk of deflation – interview in the wall street journal interview with mr miroslav singer, governor of the czech national bank, in the wall street journal, conducted by paul hannon on 11 october 2014. * * * the threat of a slide into deflation or a long period of very low inflation in the czech republic has diminished, the head of the country ’ s central bank said saturday, although he intends to maintain the weak - koruna policy at least into the start of 2016. in an interview with the wall street journal during the annual meetings of the international monetary fund in washington, miroslav singer said he had been encouraged by the stimulus measures announced by the european central bank since june, since he had expected it to take longer to react to very low inflation rates. mr. singer also said that he was confident the central bank could bring its weak - koruna policy to an end without risking a “ snapback, ” or a sharp strengthening of the currency. the czech republic is a member of the european union, but has chosen not to use the euro. it does have close economic ties to the currency area and particularly germany. as a result, low growth and low inflation in the eurozone have been a big problem for the central bank. mr. singer said that while the central bank remains worried about the possibility of another “ hiccup ” in the eurozone, he is less concerned than he was before the ecb first indicated in may that it was preparing to take action. “ the outcome was more positive than i would have expected five months ago, and things look less gloomy than they appeared before they ( ecb policy makers ) found some consensus, ” he said. the eurozone ’ s persistent economic weakness has been the main concern for policy makers gathered here over recent days. those concerns were heightened by a run of very weak data from germany that indicated the economy may have contracted for a second straight quarter in the three months to september. mr. singer believes those figures from august that recorded large falls in industrial production, manufacturing orders and exports are not reflective of the underlying state of the german economy, but instead the fact that there was a larger number of holidays than usual taken during that month. he said the czech economy, which has a similar focus on industry rather than services, had experienced similar volatility in output over the summer months. “ i would be unpleasantly surprised if the weakness in germany continues, ”

i haven ’ t so far heard of any distributed ledger technology being 2 / 3 bis central bankers'speeches used in the mainstream banking systems of europe. many institutions have been investigating the possibility, studying it, researching it, but that ’ s all. perhaps you have more information about the practical applications of this potentially promising technology than i do. the second innovation stimulated to some extent by alternative currencies is digital currency issued by central banks. one can argue that central banks issue digital currencies even now – expanding their balance sheets by creating electronic money. but this new concept is defined in a narrower sense. in our current system the money creation process is a public - private partnership, with the majority of money being created by commercial banks by means of lending. the banks are essentially creating new deposits, rather than passing on the existing ones. therefore, when the central bank wants to increase or decrease monetary balances for the final users of money ( households or non - financial companies ) it can only incentivise the change indirectly through the actions of credit institutions. central bank digital currency would bypass the financial sector and issue money to end - users directly through the balance sheet of the central bank. similarly to cash, digital money would constitute a liability of the central bank. instead of being the bank of banks, the central bank would become the “ bank of the people ” or “ for the people ”. every household or company might hold an account at the central bank directly, not via an intermediary. as we know, the swedes have gone relatively far with their e - krona project, and the danes have also proceeded with similar investigations. here in the united kingdom, the old lady has gone a long way as well. one of the main motivations for this rapid research effort is the swiftly decreasing use of cash. just some two per cent of the money supply is now created directly by the central bank in sweden, for instance. but even the avant - garde swedes consider the e - krona a complement of cash, not a fully - fledged substitute. the potential advantages of distributed ledger technology and central bank digital currency are the following : more efficient payment systems, direct and more efficient conduct of monetary policy ( perhaps even practically enabling helicopter drop of money ) and, if implemented on a sufficiently large scale, an end to the need to run costly deposit insurance schemes. but will central bank digital currency become a complete alternative to cash one day? i ’ m not sure. many questions