Faced with this situation, the digital euro could be a vehicle for retaining the option whereby citizens have access to the central bank’s safe money and avoiding the risks that would arise from total dependence on private means of payment. However, before launching a digital euro we must resolve many questions. Only thus will we be in a position to respond to the challenges and react swiftly where necessary. For one thing, we have to acquire practical experience regarding the possibilities technology offers for the operational design of this digital euro. Within the Eurosystem we must consider, among other matters, what the most appropriate technology would be, how we should shape it to ensure maximum resilience and how we would have to involve the private sector in the provision of the digital euro. Purely technical issues aside, we must further analyse the macroeconomic and financial consequences of a digital euro in the different scenarios identified, as there are basic aspects regarding the potential impact of the digital euro on the economy that would have to be clarified before taking a decision on issuing it. By way of example, I would highlight the need to minimise the adverse impact that potential banking disintermediation would have on financial stability, or the possible effects of the digital euro on situations of financial instability. These aspects probably require an additional analytical push to ensure that these unwanted secondary effects can be avoided.
UK authorities have used their convening powers to encourage market participants to establish standards of market practice that are well understood, widely followed and, crucially, that keep pace with market developments. This is what the Banking Standards Board is doing by promoting higher standards of conduct and competence across the UK banking system. It’s why the global FICC Market Standards Board (FMSB) is establishing readily understood standards for their markets. And it’s why the FX Committees will launch in May the first globally consistent code of conduct for FX markets. But codes are of little use if nobody reads, follows, or enforces them. This is where the UK’s Senior Managers Regime comes in. Senior Managers Regime The SMR addresses the common refrain of senior management that they weren’t aware that misconduct was taking place in their firms. The SMR sets a series of requirements for the most senior decision-makers of banks, building societies and major investment firms. The SMR re-establishes the link between seniority and accountability. Senior Managers are now held accountable if they fail to take reasonable steps (including training or proper oversight) to prevent or stop regulatory breaches in their areas of responsibility. 8  And the SMR prescribes responsibilities – typically to the Chair and CEO respectively – for developing and embedding a firm’s culture. Under the related Certification Regime, firms must also annually assess and certify the fitness and propriety of a wide range of risk-taking employees.