the debates have been so intense and progress so difficult to achieve. recently, negotiations over our long - run fiscal policies have become tied to the issue of raising the statutory limit for federal debt. i fully understand the desire to use the debt limit deadline to force some necessary and difficult fiscal policy adjustments, but the debt limit is the wrong tool for that important job. failing to raise the debt ceiling in a timely way would be self - defeating if the objective is to chart a course toward a better fiscal situation for our nation. the current level of the debt and near - term borrowing needs reflect spending and revenue choices that have already been approved by the current and previous congresses and administrations of both political parties. failing to raise the debt limit would require the federal government to delay or renege on payments for obligations already entered into. in particular, even a short suspension of payments on principal or interest on the treasury ’ s debt obligations could cause severe disruptions in financial markets and the payments system, induce ratings downgrades of u. s. government debt, create fundamental doubts about the creditworthiness of the united states, and damage the special role of the dollar and treasury securities in global markets in the longer term. interest rates would likely rise, slowing the recovery and, perversely, worsening the deficit problem by increasing required interest payments on the debt for what might well be a protracted period. 3 some have suggested that payments by the treasury could be prioritized to meet principal and interest payments on debt outstanding, thus avoiding a technical default on federal debt. however, even if that were the case, given the current size of the deficit and the uneven time pattern of government receipts and payments, the treasury would soon find it necessary to prioritize among and withhold critical disbursements, such as social security and medicare payments and funds for the military. moreover, while debt - related payments might be met in this scenario, the fact that many other government payments would be delayed could still create serious concerns about the safety of treasury securities among financial market participants. the hippocratic oath holds that, first, we should do no harm. in debating critical fiscal issues, we should avoid unnecessary actions or threats that risk shaking the confidence of investors in the ability and willingness of the u. s. government to pay its bills. in raising this concern, i am by no means recommending delay or inaction in addressing the nation ’ s long - term fiscal challenges – quite the opposite. i urge

michael s barr : the federal reserve's role in supporting responsible innovation speech by mr michael s barr, vice chair for supervision of the board of governors of the federal reserve system, at the federal reserve bank of philadelphia seventh annual fintech conference, philadelphia, pennsylvania, 8 september 2023. * * * thank you for the opportunity to speak today, in the midst of a wave of innovation in the payments system. there are a range of important players in the payments system and the federal reserve has important roles as a supervisor as well as a payments operator. regardless of who is providing the service, our payments system needs to meet fundamental principles. among those core principles is ensuring that the payments infrastructure supports broad access and promotes financial inclusion. payments are essential for everyday life, and too often, low - and moderate - income households and small businesses don't have access to the payments services they need at a reasonable cost. moreover, as the payments system evolves, it needs to provide strong consumer protections. the payments system needs to welcome competition, provide consumers with choices, and support innovation. the payments system should empower consumers to have better control over their financial lives, including their identity and financial data. and more broadly, our payments system should promote efficiency, convenience, speed, low cost, resiliency, privacy, and security. finally, our payments system must and does rely on trust, and this trust must be maintained as the system is updated. this includes trust that the payments system is not used for illicit purposes, that lawful payments will always be honored, and that neither the government nor private actors will act improperly based on use of the payments infrastructure. not that long ago, the federal reserve was facilitating payments by moving bundles of checks around the country on trucks and trains! and we still have important work to do to ensure that those who rely on checks can get their funds in a timely way and that the system is not exposed to fraud. but more recently the focus has been on improving our electronic payments infrastructure. the fed has long operated the fedwire funds service, used by banks to conduct large - value, same - day transactions among themselves. in addition, the automated clearinghouse ( ach ) service supports batch payments of more modest value. while the fedwire funds service and ach transactions have served the economy well for decades, the economy has changed dramatically over that time. there is a demand for faster payments, and the fed has recognized that today's households and businesses would