bank of england old dogs, new tricks : adapting central bank balance sheets to a world of digital currencies − remarks by andrew hauser given at federal reserve bank of new york and columbia sipa workshop on ‘ monetary policy implementation and digital innovation ’, new york 01 june 2022 bank of england speech introduction the explosion of interest in digital currencies poses deep and challenging policy questions on everything from monetary and financial stability, to privacy, competition, money laundering and social inclusion. public authorities are evaluating the arguments for and against introducing their own central bank digital currencies ( cbdcs ). 1 and in the private sector there ’ s a lively debate about what it might take to make so - called ‘ stablecoins ’ genuinely stable. up to now, though, there ’ s been less discussion about how central bank balance sheets might need to adjust to support the safe and effective provision of fiat - based digital currencies. this workshop is therefore well timed. i will focus my remarks today around five main messages. 1. retail cbdcs could be a big deal for central bank balance sheets let ’ s start with retail cbdc – a central bank liability, in digital form, held directly by individuals, and used to make day to day payments. many of the raw ingredients of a cbdc are already familiar to central banks : individuals can already hold our liabilities, in the form of physical banknotes ; and we already provide digital liabilities, albeit to only a few depositors ( predominantly banks ). the new thing would be to combine those ingredients together, at scale. the question of whether to do so is complex, and beyond the scope of my remarks today. the uk will publish a consultation on this issue later this year. but the implications for central bank balance sheets will also depend heavily on how any cbdc is designed : on who can hold it, where it can be used, how much can be held, and whether it is interest - bearing ( table 1 ). the bank of england ’ s work in this area is available at : uk central bank digital currency | bank of england. bank of england source : bank of england design choices that placed the economic features of cbdc close to today ’ s banknotes might have relatively limited implications for central bank balance sheets, at least in normal economic conditions. choices that positioned the economic features of cbdc closer to today ’ s retail commercial bank deposits could have a more material impact. to give some sense of potential

european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, and mr lucas papademos, vice - president of the european central bank, frankfurt am main, 4 february 2010. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference today. we will now report on the outcome of today ’ s meeting of the governing council. based on its regular economic and monetary analyses, the governing council decided to leave the key ecb interest rates unchanged. the current rates remain appropriate. taking into account all the information and analyses that have become available since our meeting on 14 january 2010, price developments are expected to remain subdued over the policyrelevant horizon. the latest information has also confirmed that euro area economic activity continued to expand around the turn of the year. looking ahead, the governing council expects the euro area economy to grow at a moderate pace in 2010. the recovery process is likely to be uneven and the outlook remains subject to uncertainty. the outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term. all in all, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. medium to longer - term inflation expectations remain firmly anchored in line with the governing council ’ s aim of keeping inflation rates below, but close to, 2 % over the medium term. let me now explain our assessment in greater detail, starting with the economic analysis. the latest information confirms that economic activity in the euro area continued to expand around the turn of the year. the euro area has been benefiting from a turn in the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system. however, these stimuli will unwind over time, while activity is likely to be adversely affected by the ongoing process of balance sheet adjustment in the financial and non - financial sectors, both inside and outside the euro area. in addition, low capacity utilisation rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby lowering consumption growth. for these reasons, the euro area economy is expected to grow only at a moderate pace in 2010 and the recovery process could be uneven. the governing council continues to view the risks to this outlook as broadly balanced. on the upside, confidence