and their potential solutions are still being debated domestically and internationally. u. s. and global regulators need to take a hard, comprehensive look at the systemic risks present in wholesale short - term funding markets. analysis of the appropriate ways to address these vulnerabilities continues as a priority this year for the federal reserve. in the short term, though, there are several key steps that should be taken with respect to shadow banking to improve the resilience of our financial system. first, the regulatory and public transparency of shadow banking markets, especially securities financing transactions, should be increased. second, additional measures should be taken to reduce the risk of runs on money market mutual funds. the council recently proposed a set of serious reform options to address the structural vulnerabilities in money market mutual funds. third, we should continue to push the private sector to reduce the risks in the settlement process for tri - party repurchase agreements. although an industry - led task force made some progress on these issues, the federal reserve concluded that important problems were not likely to be successfully addressed in this process and has been using supervisory authority over the past year to press for further and faster action by the clearing banks and the dealer affiliates of bank holding companies. 2 the amount of intraday credit being provided by the clearing banks in the tri - party repo market has been reduced and is scheduled to be reduced much further in the coming years as a result of these efforts. but vulnerabilities in this market remain a concern, and addressing these vulnerabilities will require the cooperation of the broad array of participants in this market and their federal regulators. the federal reserve will continue to report to congress and publicly on progress made to address the risks in the tri - party repo market. for additional information, see www. newyorkfed. org / banking / tpr _ infr _ reform. html bis central bankers ’ speeches in addition to these concrete steps to address concrete problems, regulators must continue to closely monitor the shadow banking sector and be wary of signs that excessive leverage and maturity transformation are developing outside of the banking system. conclusion the financial regulatory architecture is stronger today than it was in the years leading up to the crisis, but considerable work remains to complete implementation of the dodd - frank act and the post - crisis global financial reform program. over the coming year, the federal reserve will be working with other u. s. financial regulatory agencies, and with foreign central banks and regulators, to propose and final

come back to this consultation in a moment. but first i will outline the characteristics of a digital euro, as well as the advantages and the challenges it could present. i will also discuss some scenarios that could require the ecb to issue a digital euro. what is a digital euro? we already have an array of choices when it comes to retail payments : central bank money in the form of cash, commercial bank money – for example, digital bank deposits – and non - bank digital money ( such as payment cards ). what we do not have is a digital currency that is issued by the central bank and that we can use for all our daily transactions, including in e - commerce. a digital euro would fill this gap : it would be an electronic form of central bank money accessible to all citizens and firms – in other words, a digital equivalent of euro banknotes. it would provide 1 / 4 bis central bankers'speeches costless access to a simple, risk - free and trusted digital means of payment, accepted throughout the euro area. in the digital era, it would preserve the public good that the euro provides to european citizens. compared with existing means of digital payments, a digital euro would provide added value in several ways. first of all, it could be used for payments anywhere, by anyone and at any time – just like cash in the physical world. second, it would bring simplicity : a digital euro should be designed to be easy to understand, easy to use and easy to transfer. regardless of its features or the technology it would be based on, people from all groups in society should be able to use it in their daily lives. this is because making a payment is about more than just exchanging money for goods and services : it is a form of social interaction made possible by money, which has been described as “ the most universal and most efficient system of mutual trust ever devised ” 7. finally, a digital euro would increase privacy in digital payments thanks to the involvement of the central bank, which – unlike private suppliers of payment services – has no commercial interests related to consumer data. ensuring privacy is an essential element of modern democracies and part of our european values. payments must also respect people ’ s right to privacy in the digital era, and the design of a digital euro would have to respect this principle. this is a core aspect we will look at – indeed, we have already started exploring possible ways of enhancing privacy. 8 at the same time, payments in a digital euro