www. cbo. gov / system / files / 2021 - 01 / pl _ 116 - 260 _ summary. pdf ; and congressional budget office ( 2021 ), “ estimated budgetary effects of h. r. 1319, american rescue plan act of 2021, as passed by the senate on march 6, 2021, ” summary tables, march 10, https : / / www. cbo. gov / system / files / 202103 / estimated _ budgetary _ effects _ of _ hr _ 1319 _ as _ passed _ 0. pdf. see congressional budget office ( 2021 ), the budget and economic outlook : 2021 to 2031 ( washington : cbo, february ), available at https : / / www. cbo. gov / publication / 56970 ; and congressional budget office ( 2015 ), an update to the budget and economic outlook : 2015 to 2025 ( washington : cbo, august ), p. 71, https : / / www. cbo. gov / sites / default / files / 114th - congress - 2015 - 2016 / reports / 50724 - updateonecolumn _ 0. pdf. - 3the economy towards those goals. deficit financing and debt servicing issues play no role in our policy decisions and never will. chair powell made this same point in his recent comments to the economic club of new york. 7 my objective today is to reinforce that message. this does not mean, however, that the treasury and federal reserve should never work together. my comments today will focus on the issue of cooperation — on when and how much is beneficial and on the potential costs that should not be overlooked. let me point out that there are two fronts for interaction between the treasury and the federal reserve. the first is what i will call “ back office ” operations. by this term, i mean the range of fiscal agency services that the federal reserve provides to the treasury by statute. 8 for example, the federal reserve maintains the treasury ’ s operating account, accepting deposits, paying checks, and making electronic payments on behalf of the treasury. it provides securities services on behalf of the treasury, supporting the auction, issuance, and redemption of marketable treasury securities. it also provides application development and infrastructure support services, assisting in the treasury ’ s efforts to improve government cash - and debt - management processes. since the federal reserve is the fiscal agent for the treasury — and to play that role efficiently and at low cost — the federal reserve and

that are ready to be activated. overall, though, the rules for small banks can be less strict than for big banks. and this is already the case : in many respects smaller banks have an easier life than the large ones – for example, in financial reporting and supervision. should a further easing of the rules be discussed, this would however throw up a difficult question : how big, or rather how small, should a bank be to be considered for this easing? what are the right thresholds? in other areas, we need greater harmonisation. that becomes apparent when you take a closer look at the european rules – they are neither uniform nor complete. certain areas of supervision which would benefit from a single european rule continue to be determined by national regulations. 1 / 2 bis central bankers'speeches let ’ s take the example of a british bank. in the event of a “ hard brexit ” the bank could lose its eu passport, which gives it access to the internal market. in order to continue to do business in the internal market, it would need to establish a base in the eu. ideally, the country in which it sets up its business should be an unimportant factor. but it is not. despite the banking union, location still plays an important role in a bank ’ s life. if a british bank conducts its business via a branch in the euro area, then it is subject to national supervision and national rules. this results in the bank having different capital and liquidity requirements, depending on the country where the bank has set up its branch. of course, the bank will also look closely at the different national recovery and resolution conditions. and they have only been marginally harmonised, so there is no uniform toolset for crises. for instance, i have sorely missed the opportunity to declare a moratorium recently. the examples i have mentioned show how many national barriers are still blocking the way to a european banking market. in europe too the principle for banks should be : same business, same risks, same rules. this ensures fair competition and prevents banks from exploiting regulatory differences. ultimately, harmonised rules pave the way for a stable banking market. thank you for your attention. 2 / 2 bis central bankers'speeches