The Federal Reserve Banks now electronically present more than 20 percent of the checks they collect, of which one in four are also truncated at the Fed. Several banks, including the Federal Reserve Banks, are also building data archives in which to store digital images of checks to replace microfilm technologies and to provide mechanisms to process images of truncated checks.
Here, I would like to spend some time to explain the mechanism behind this. First of all, by committing to achievement of the 2 percent price stability target at the earliest possible time and announcing the continuation of a new phase of monetary easing into the future to underpin that commitment, the Bank aims to drastically change people’s expectations and raise inflation expectations.