, a completely different endeavour and unlikely to be possible in practice, in particular when global uncertainty severely clouds the medium - term outlook. 20 incidentally, most market criticism of the federal reserve ’ s dot plot focuses on the fact that the dots represent individual views rather than the committee ’ s joint assessment. 21 second, even a credible interest rate path may cause misperceptions. consider the current market environment that is characterised by regulatory - driven demand for high quality liquid assets and large securities holdings by central banks. one tangible consequence of these two factors is an increased demand for safe assets that has led to substantial and unprecedented negative term premia at the short end of the curve. this means that the path for rates truly expected by investors is likely to be materially higher than that suggested by plain forward rates. this greatly complicates the clarity of any guidance on the future path. a very simple way to see this is to compare market - based and survey - based expectations. you can see this on my next slide, where the grey shaded area represents the difference between the median fed funds rate projections in the new york fed ’ s survey of primary dealers and the nominal fed funds futures rates. 7 / 11 bis central bankers'speeches clearly, a good part of the discussion around this gap would vanish if the signals extracted from market prices were treated more carefully. the chart shows a snapshot of the situation earlier this year, but the argument holds more widely. a third source of confusion, specific to the ecb, relates to the policy rate the central bank should provide a numerical path for. in the current environment of large excess liquidity the deposit facility rate is de facto our key policy rate. but charting its future path would be complicated by the endogenous impact of changes in excess liquidity on its level. at longer tenors in particular, it would be difficult for markets to disentangle the fraction of the path that reflects a genuine change in policy rates from that reflecting changes in excess liquidity. numerical guidance on our main refinancing rate, by contrast, might be of little value to market participants at shorter horizons, unless we were to convey, in parallel, information on the expected width of the rate corridor. in fact, one might even argue that would the governing council decide to publish a path for future interest rates, it would have to anticipate decisions on the ecb ’ s long - term operational framework, such as whether we intend to retain the pre -

stability, and are debt - financed. if we could fast - forward a bit — - can you imagine a situation where there is going to be one day a digital euro? do you completely rule out such development — a digital fiat currency? i ’ m not a science fiction writer so in my official imagination i would restrain myself at best to look at certain circumstances if citizens were to desert cash, which is not the case right now. i could imagine a digital representation of cash, meaning a digital issuance that would replicate the features of cash, not a new digital currency disrupting bank intermediation, in order not to rock the boat of our whole economy and put into question the functioning of a two - tier banking system. so why would we do it? for the sake of disruption? we have made so much effort to make our banking system safer and sounder again, and we are still not fully finished. why would we then discontinue with that? i think there would be a price – and maybe not a small price – in doing away with the banking system from one day to the next. 3 / 3 bis central bankers'speeches