Let me discuss each in 9  turn . Distributed ledger technology (DLT) (3 PoCs)  DLT has in many respects been the poster-child for FinTech. Thrown into prominence by the advent of bitcoin and other cryptocurrencies, the attraction of DLT to central banks really lies in the potentially highly attractive resilience characteristics of the underlying technology. In its purest form, a DLT network operates with no centre, and every node in the network holds a full copy of the ledger. So the failure of a node has no impact on the overall resilience of the system, with transactions simply rerouting elsewhere. A single ledger could also eliminate the need for costly reconciliations between market participants, increasing efficiency and reducing operational risk. For central banks currently operating centralised payments and settlements systems with only limited redundancy and facing growing cyber and operational threats, such a model has obvious attractions. Our first DLT PoC, undertaken with PwC, proved it was possible to build a multi-node scalable DLT environment enabling the transfer of ownership of a fictitious asset. But it also demonstrated that the technology was some way from being sufficiently robust or scaleable to form the core of live central bank infrastructure such as the Bank’s Real-Time Gross Settlement (RTGS) service – a conclusion that helped inform the Bank’s plans for its RTGS renewal programme. PoCs by other central banks have reached 10  broadly similar conclusions . 9  More detailed write-ups of completed PoCs can be found at: http://www.bankofengland.co.uk/Pages/fintech/default.aspx.
BIS Review 105/2009  5  Figure 5 Volatility and risk premium (basis points, percent)  Quarterly survey on banking credit (balance of responses, percent) Credit approval standards (*)  900  115  800  Demand for new credits (*)  75  75  75  75  100  50  50  50  50  700  85  25  25  25  25  600  70  0  0  0  0  500  55  -25  -25  -25  -25  400  40  -50  -50  -50  -50  300  25  -75  -75  -75  -75  200  10  -100  -100  -100  Jan.08  Jul.08  EMBI  Jan.09  VIX  Jul.09  Jun.05  Jun.06  Jun.07  Jun.08  SMEs  Jun.09  Consumer  -100  Jun.05  Jun.06  Jun.07  Jun.08  Jun.09  Housing mortgages  (*) Average responses per quarter. Negative figures denote tigher conditions than in the previous quarter. Fuentes: Central Bank of Chile, Bank Lending Survey; Bloomberg. 6  BIS Review 105/2009