Greater transparency in this form cannot eliminate policy uncertainty, but it can reduce it to a level closer to what the members of the FOMC individually confront. Alongside these changes in the conduct of monetary policy, the Fed today operates with a significantly greater degree of deference from the Executive branch than was true for most of its history. Executive branch officials do not comment publicly on the desirable course of monetary policy, and it would be unusual today for a White House or Treasury official to admit to seeking to influence in private the actions of the Chairman or the FOMC. These improvements in the de facto degree of independence with which the Fed operates are the result of changes in behavior and practice of the Executive branch. They are not written into law. They probably were aided by improvements in monetary policy transparency and by the favorable results the Fed has delivered under the past two chairmen. And they are in part the result of a broader recognition that monetary policy credibility depends significantly on both the de jure and de facto independence of the central bank. Changes in practice based on knowledge and learning may be as important as what is established by law in contributing to the independence of the central bank. The formal institutional arrangements of the central banks around the world have changed more over the last few decades than those governing the Fed. Central bank independence is much more firmly established and more widespread.
Security of payments The rapid development of e-commerce in recent years and the increased use of electronic channels to initiate payments pose new challenges related to ensuring the security and customers’ data. As of September 2019, it has become mandatory in Europe to implement strong customer authentication. This means that when an electronic payment is initiated, at least two independent elements from different categories – knowledge, possession and inherence – must be used in the process. In the case of remote payment transactions, e.g. via internet, an additional requirement is introduced to perform so-called dynamic linking – linking the code for each transaction to a specific amount and a specific payee. These requirements are implemented by the payment service providers in our country. For the practical implementation of these regulatory requirements, new technologies are again coming to the rescue. Recently, biometric authentication has shown great potential by providing verification of elements characterising the user: fingerprint, iris scanning, facial recognition, etc. Many payment service providers in Bulgaria have already introduced similar customer identification methods using mobile banking applications. Apart from convenience, this leads to a significant increase in the security of the payment process, allowing the use of biometric data for customer identification. On the occasion of the forthcoming review of the Second Payment Services Directive, a comprehensive assessment of the impact of strong customer authentication on the level of payment fraud is to be carried out.