that it is both an attempt to engineer a beggar - my - neighbour devaluation and that it will boost capital inflows and foster asset - price bubbles. these criticisms seem to me mostly off the mark. central banks undertake asset purchases financed by the issuance of central bank money in order to boost nominal spending. they do that by depressing a range of longer - term real yields and raising asset prices. the earlier phases of quantitative easing both here and in the united states indeed appear to have lowered longer - term nominal and real yields below where they would otherwise have been. 2 this time around, the transmission channel has been rather different, as after falling on the anticipation of further asset purchases, longer - term us yields rose. but the policy should only prove inflationary in the medium to long run if it results in excessive nominal spending growth, which hardly appears likely at the current juncture. only if the federal reserve fails to tighten policy promptly as the recovery takes hold is excessive inflation likely to be a problem. the criticisms from outside seem to me almost as misplaced. while quantitative easing is likely to be associated with exchange rate depreciation, it also boosts domestic spending. demand in other countries therefore rises as a result of the increased demand in the united states, as well as falling as a result of the appreciation of their currencies. these are just the normal mechanisms that operate when official interest rates are cut in one country. it is then an empirical matter which is the dominant channel. quantitative easing is consequently very different in character from sterilised exchange rate intervention, which merely redistributes global demand. there is, though, more substance to the concern that stimulatory monetary policies in the developed economies have encouraged a search for yield and capital inflows into the emerging economies. so there is some justification for the imposition of temporary restraints on those inflows. but where such asset price pressures are building, they seem more likely to be related to overly loose monetary and financial policies in those countries and their unwillingness to allow exchange rates to bear more of the strain. it is the euro area, however, that is of particular importance to the united kingdom. in aggregate, the euro area looks to be undergoing a steady recovery, not dissimilar to ours. output in the third quarter was 1. 9 % higher than a year earlier, roughly in line with the euro area ’ s historical average growth rate. but that masks markedly diver

uk / news / 2021 / april / boe - publishes - policy - for - omnibus - accounts - in - rtgs https : / / www. bankofengland. co. uk / news / 2021 / april / bank - of - england - statement - on - central - bank - digital - currency all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice that means things like the legal entity identifier ( lei ), a global standard designed to uniquely identify any legally distinct entity that engages in financial transactions, whose adoption the bank is supporting. and it means standards that enable the efficient transfer of data between multiple parties like iso20022, which we are implementing alongside our rtgs renewal programme. as gareth ramsay, our chief data officer put it in a recent speech, standards like these are “ a key part of the soft infrastructure of the digital age ”. 8 they are foundational for unlocking many of the benefits of data for both the public and private sector. such standards could help support the idea of an open data platform for sme finance that the bank has helped to champion. by bringing together a global identity standard and a safe, secure and permissioned method of sharing information, an open platform could harness novel data sources and advanced analytics to provide smes with more choice and better access to productive finance. the bank set out some ideas on the design of such an open platform for smes last year. 9 data collection is also integral to the work that the bank itself does in pursuit of its wider mission. without the data we collect, we cannot identify risks, design good policy, and take action in a timely and targeted fashion. that ’ s why delivering ‘ common data standards ’, rules and methods that consistently label and describe financial data, are a priority long term reform for us. reflecting that priority the bank are setting up a joint transformation programme with the financial conduct authority ( fca ) and industry. and sam woods, the deputy governor for prudential regulation, and nikhil rathi, ceo of the fca, recently published a letter to firms providing an update on this work, and asking firms to work with us in partnership to deliver common data standards and other crucial reforms. 10 ai and aippf yet another rapidly - developing area is the adoption of ai in finance. we know that finance is one of the sectors that has seen widespread adoption of ai in recent years