BIS

Transactional demand for central bank digital currency

Retrieved on: 
Thursday, April 18, 2024
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Key Points: 

    Digital euro safeguards – protecting financial stability and liquidity in the banking sector

    Retrieved on: 
    Thursday, April 18, 2024
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    A digital euro would offer a wide range of

    Key Points: 
      • A digital euro would offer a wide range of
        financial stability benefits, including safeguarding the role of public money and
        strengthening the strategic autonomy and monetary sovereignty of the euro area in
        the digital era.
      • Keywords: CBDC, digital euro, bank intermediation, financial stability risks.
      • A digital euro has the potential to offer a wide range of financial stability
        benefits for the digital era.
      • A digital euro would
        stimulate financial innovation among private sector entities and enhance the
        efficiency and resilience of the financial system by supporting competition and
        diversity within it.3 In addition, a digital euro would strengthen the strategic autonomy
        and monetary sovereignty of the euro area.
      • A digital euro would be designed to minimise risks to the financial system.
      • 2

        The preparation phase will pave the way for a future decision on whether or not to issue a digital euro.

      • When gauging the implications for the euro area banking sector of introducing a
        digital euro, take-up would be key, as it would determine the level of deposit
        outflows.
      • In the latter case, the
        issuance of a digital euro would not affect banks? balance sheets, since banks would return euro
        banknotes to the Eurosystem in exchange for digital euro.
      • Banknotes and digital euro are two different
        types of central bank liability, so a swap between banknotes and digital euro would only affect the
        composition and not the size of the Eurosystem?s balance sheet.
      • In our analysis, we model only the
        substitution of commercial bank deposits with a possible future digital euro.
      • 8

        The legislative proposal on a digital euro provides for the inclusion of such safeguards and establishes
        specific criteria for the limits, aiming to contain the use of a digital euro as a store of value.

      • ECB Occasional Paper Series No 346

        4

        2

        The added value of digital euro
        safeguards such as holding limits
        To understand the benefits of digital euro safeguards, such as holding limits, it
        is useful to first consider the implications of introducing a CBDC without
        adequate safeguards.

      • (2022), ?Central bank digital currency and bank intermediation: Exploring different
        approaches for assessing the effects of a digital euro on euro area banks?, Occasional Papers, No 293,
        European Central Bank, Frankfurt am Main, May.
      • deciding to adopt the digital euro, and (ii) the average amount of digital euro in a
        wallet.
      • At the same time, as discussed in this paper, the design of a digital euro would
        include effective safeguards, such as individual holding limits, to mitigate
        potential financial stability risks.
      • ECB Occasional Paper Series No 346

        15

        an upper bound on the amount of digital euro in circulation, thereby addressing and
        limiting financial stability concerns associated with the introduction of a digital euro.

      • (2023), ?A digital euro: gauging the
        financial stability implications?, Financial Stability Review, ECB, November.

    /R E M I N D E R -- Travelling for Easter? The Canada Border Services Agency gives tips for a smooth trip/

    Retrieved on: 
    Thursday, March 28, 2024
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    Here are some tips to help you plan for your trip:

    Key Points: 
    • Here are some tips to help you plan for your trip:
      Plan ahead, expect delays and check border wait times .
    • Travellers crossing the border by land are encouraged to cross during non-peak hours such as early mornings.
    • Border services officers are always watching for missing children , and in the absence of the letter, officers may ask additional questions.
    • You may also contact Border Information Service (BIS) line toll-free within Canada at 1-800-461-9999 for more information

    Travelling for Easter? The Canada Border Services Agency gives tips for a smooth trip

    Retrieved on: 
    Friday, March 22, 2024
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    OTTAWA, ON, March 22, 2024 /CNW/ - The Canada Border Services Agency (CBSA) reminds travellers of what to expect when crossing the border over the Easter long weekend.

    Key Points: 
    • OTTAWA, ON, March 22, 2024 /CNW/ - The Canada Border Services Agency (CBSA) reminds travellers of what to expect when crossing the border over the Easter long weekend.
    • Here are some tips to help you plan for your trip:
      Plan ahead, expect delays and check border wait times .
    • Border services officers are always watching for missing children , and in the absence of the letter, officers may ask additional questions.
    • You may also contact Border Information Service (BIS) line toll-free within Canada at 1-800-461-9999 for more information

    Hydrogen Economy Set to Start a 'Gold Rush' in the Clean Fuel Industry: BIS Research

    Retrieved on: 
    Thursday, March 21, 2024
    Hydrogen, Research, Jeremy Rifkin, Agriculture, BIS, PEM, Carbon, Water, Heart, Hydrogen economy, Renewable energy, Electrolysis, Mining

    FREMONT, Calif., March 21, 2024 /PRNewswire/ -- The emergence of the 'Hydrogen Economy' has marked a pivotal shift toward eco-friendly energy alternatives and has started a new chapter in sustainable fuel utilization. At the heart of this transformation is hydrogen, which is distinguished by its varieties, i.e., notably green and white hydrogen. Green hydrogen, obtained from splitting water using renewable energy, has been celebrated for its low environmental impact. The green hydrogen market is expected to grow at a CAGR of 67.19% and reach $141.29 billion by 2033. White hydrogen, also called 'Gold Hydrogen,' occurs naturally and can be mined. The discovery of naturally occurring white hydrogen has kicked off a gold rush and has encouraged several players to locate and extract natural hydrogen.

    Key Points: 
    • At the heart of this transformation is hydrogen, which is distinguished by its varieties, i.e., notably green and white hydrogen.
    • The green hydrogen market is expected to grow at a CAGR of 67.19% and reach $141.29 billion by 2033.
    • The global hydrogen supply chain is currently dominated by green hydrogen and encompasses its generation, conservation, and distribution.
    • The rapidly growing 'Hydrogen Economy' is on the verge of transforming the clean fuel landscape, with hydrogen taking center stage in this fight for a greener future.

    Hydrogen Economy Set to Start a 'Gold Rush' in the Clean Fuel Industry: BIS Research

    Retrieved on: 
    Thursday, March 21, 2024
    Hydrogen, Research, Jeremy Rifkin, Agriculture, BIS, PEM, Carbon, Water, Heart, Hydrogen economy, Renewable energy, Electrolysis, Mining

    FREMONT, Calif., March 21, 2024 /PRNewswire/ -- The emergence of the 'Hydrogen Economy' has marked a pivotal shift toward eco-friendly energy alternatives and has started a new chapter in sustainable fuel utilization. At the heart of this transformation is hydrogen, which is distinguished by its varieties, i.e., notably green and white hydrogen. Green hydrogen, obtained from splitting water using renewable energy, has been celebrated for its low environmental impact. The green hydrogen market is expected to grow at a CAGR of 67.19% and reach $141.29 billion by 2033. White hydrogen, also called 'Gold Hydrogen,' occurs naturally and can be mined. The discovery of naturally occurring white hydrogen has kicked off a gold rush and has encouraged several players to locate and extract natural hydrogen.

    Key Points: 
    • At the heart of this transformation is hydrogen, which is distinguished by its varieties, i.e., notably green and white hydrogen.
    • The green hydrogen market is expected to grow at a CAGR of 67.19% and reach $141.29 billion by 2033.
    • The global hydrogen supply chain is currently dominated by green hydrogen and encompasses its generation, conservation, and distribution.
    • The rapidly growing 'Hydrogen Economy' is on the verge of transforming the clean fuel landscape, with hydrogen taking center stage in this fight for a greener future.

    The Eurosystem Integrated Reporting Framework ‒ an overview

    Retrieved on: 
    Friday, April 5, 2024
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    The Eurosystem Integrated

    Key Points: 
      • The Eurosystem Integrated
        Reporting Framework ? an overview
        1

        Background
        European Union (EU) banks face a whole range of data reporting obligations,
        including for statistical, resolution and prudential information.

      • Existing ECB statistical regulations specify the information that must be reported, but
        not how the actual reporting process is to be carried out.
      • The Eurosystem Integrated Reporting Framework ? an overview

        1

        submitted by reporting agents to NCBs.

      • This arrangement dates back to when the ECB was set up in 1998 and was justified
        at the time, as it meant that statistical reporting could be founded on well-established
        national reporting frameworks.
      • Figure 1
        Current Eurosystem approach to collecting statistical information from banks

        Banks

        NCBs

        ECB

        Transformations by banks

        Transformations by NCBs
        Country A

        BSI & MIR

        Integrated approach
        ?

        SHS

        Country B

        Operational
        systems

        Monetary data

        b.o.p., i.i.p &
        sector accounts

        Credit register
        Sector accounts

        AnaCredit
        b.o.p.

      • Under the new paradigm, cross-border banks could unify the
        technical specifications of their reporting for all their European entities.
      • 2

        The scope of the IReF
        The IReF seeks to integrate existing ESCB statistical data requirements for banks as
        far as possible into a single, standardised reporting framework applicable across the
        euro area.

      • The feasibility of aligning the IReF
        more closely with the Financial Reporting (FINREP) requirements applicable at solo
        level11 is also being assessed.
      • Some NCBs have
        developed an integrated reporting framework for investment funds (covering both
        MMFs and non-MMFs).
      • The Eurosystem reviewed the results of the CBA to identify optimal features for
        banks, the Eurosystem and its users.
      • This time frame will give reporting agents and the Eurosystem enough lead time to
        prepare the legal and technical framework without unduly delaying the expected
        reduction in the reporting burden.
      • 16

        See ?On a Feasibility Study of an Integrated Reporting System under Article 430c CRR?, EBA, 2021;
        and ?The EBA?s feasibility study on integrated reporting system provides a long-term vision for
        increasing efficiencies and reducing reporting costs?, EBA, December 2021.

      • The Eurosystem is already cooperating closely with the banking industry to optimise
        reporting and reduce the overall reporting burden via the Banks? Integrated Reporting
        Dictionary (BIRD).19 BIRD offers a redundancy-free source (i.e.
      • The IReF describes statistical requirements in a redundancy-free layer
        and will represent future statistical reporting obligations issued by the ECB and
        applicable to Eurosystem banks.
      • Data quality should increase and costs decrease, as the BIRD input layer would
        provide a comprehensive and flexible tool to support data reporting.

    Philip R. Lane: The economic outlook and monetary policy

    Retrieved on: 
    Wednesday, April 3, 2024
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    Key Points: 

    Debate on: Is the inflation surge over and what are the lessons for monetary policy?

    Retrieved on: 
    Wednesday, April 3, 2024
    Consensus, Momentum, Angelini, Tax, MIR, Exercise, Consensus Economics, BIS, DFR, Interest, APP, Labour, Policy, Bank of Greece, PEPP, BSI, ECB, Observation, Aes, Evolution, Refinitiv, Cargo, GDP, T2, Watcher, T3, Deutsche Bundesbank, LHS, Electricity, Projection, MMR, Real, T+2, Disinflation, Bank of France, SMA, Food, OIS, MFI, Perception, CES, Economics, Persistent, Bank for International Settlements, SVAR, Growth, MPE, Common, Consensus decision-making, Bank, XXIV, ILS, HICP, Bloomberg, RHS, BVAR, Elasticity, Unit, Lombard, Surface finishing

    Shocks to the shortages variable are constructed as deviations in the values from the sample mean.

    Key Points: 
      • Shocks to the shortages variable are constructed as deviations in the values from the sample mean.
      • Shocks to the vacancy-to-unemployment ratio (labour market variable) are constructed
        as the actual value minus the value in the fourth quarter of 2019.
      • ?Indirect impact of energy prices on non-energy inflation? is the sum of the indirect effects of oil,
        gas and electricity prices.
      • 3

        Historical
        Rubric comparison of inflation episodes in the euro area ? headline and core
        Headline

        Core

        (percentage points)

        (percentage points)
        Current euro area episode
        Past global episodes

        Current euro area episode
        Past global episodes
        2

        2

        0

        0

        -2
        -4

        -2

        -6
        -8

        -4

        -10
        -12

        -24

        -18

        -12

        -6

        0

        6

        12

        18

        -6

        24

        Months around inflation peak

        -24

        -18

        -12
        -6
        0
        6
        12
        Months around inflation peak

        18

        Sources: BIS, Eurostat and ECB calculations.

      • The dark blue line represents the latest developments in headline and core inflation for the euro area, relative to the October
        2022 peak.
      • Non-energy industrial goods inflation refers to a panel of all euro area countries, while services inflation refers to
        a panel of 30 AEs and 28 EMEs.
      • Month = 0 is when the headline inflation value is at the highest during that particular episode.
      • The dark blue line represents the latest developments
        in non-energy industrial goods and services inflation for the euro area, relative to the October 2022 peak.
      • unprocessed
        food and energy

        HICPX

        8
        3.0

        3.0

        2.5

        2.5

        2.0

        2.0
        1.5

        1.5
        1.0
        Feb-24

        Jul-24

        1.0
        Dec-24 Feb-24

        Jul-24

        8

        7

        7

        6

        6

        5

        5

        4

        4

        3

        3

        2

        2

        1

        1

        Adjusted
        measures

        Difference
        4

        3

        2

        1

        0
        0
        0
        Feb-24 Jan-23 Jul-23 Jan-24
        Jan-23 Jul-23 Jan-24
        Feb-24 Jan-23 Jul-23 Jan-24
        Feb-24

        Dec-24

        Sources: Eurostat, March 2024 ECB staff short-term inflation outlook, Consensus
        Economics, Bloomberg and ECB calculations.

      • The ?adjusted?
        measures abstract from energy and supply-bottleneck shocks using a large SVAR, see
        Ba?bura, Bobeica and Mart?nez-Hern?ndez (2023), ?What drives core inflation?
      • Notes: 5-days moving average risk-neutral
        probabilities of inflation implied by five-year and tenyear zero-coupon inflation options.
      • 16

        8

        12
        Quarters

        16

        20

        Policy
        Rubriccounterfactuals
        Interest rate under alternative
        counterfactuals

        Counterfactual impacts on
        Inflation

        (percentages per annum)

        (annual percentage change)

        Baseline
        Earlier and longer
        Earlier, longer and higher

        8

        Baseline

        7
        6
        5
        4
        3
        2
        1
        0
        -1
        2021Q4

        2022Q4

        2023Q4

        2024Q4

        Earlier, longer and higher

        10

        2

        8

        0

        6

        -2

        4

        -4

        2

        -6

        0

        -8

        -2

        2025Q4

        Earlier and longer

        Output gap

        (p.p.

      • The RHS chart displays the impact on inflation (first panel) and output gap (second panel) for each of the hypothetical alternative paths of the interest
        rate.
      • As a caveat, financial feedback loops as well as feedback loops between inflation expectations and inflation are not activated.

    Isabel Schnabel: R(ising) star?

    Retrieved on: 
    Wednesday, April 3, 2024
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    This box investigates how households have responded to the 2021-23 inflationary episode using evidence from the ECB’s Consumer Expectations Survey.

    Key Points: 
    • This box investigates how households have responded to the 2021-23 inflationary episode using evidence from the ECB’s Consumer Expectations Survey.
    • The findings suggest that households have primarily adjusted their consumption spending to cope with higher inflation.