Deposit rates dropped significantly at maturities of one year or more, while the rates on our instruments at terms of two or more years, also fell after the announcements. One issue that has been on the table, not only in Chile but in the developed world and a number of emerging economies as well, is precisely the behavior of longer-term interest rates. Unlike those at very short term, which are largely arbitraged by the monetary policy stance, interest rates on long term government bonds are more influenced by, among other factors, the appetite for risk, the evolution of interest rates around the world and the widespread uncertainty prevailing in the economy. This last point is connected with expectations for long-term inflation and growth and fiscal solvency prospects, with particular strength in those economies that have had to embark in costly financial packages and bank bail-out programs, thereby multiplying their levels of public debt. In some emerging economies, and even in some developed ones, this increased debt has spurred doubts about the sustainability of their fiscal accounts and monetary arrangements, questioning their capacity to grow in the coming years. Although luckily, and thanks to the efforts made, the Chilean economy is not in such a situation, the determination of the long-term interest rates does depend indisputably not only on the prospects for growth and inflation – and thus on monetary policy – but also on portfolio decisions of domestic agents and the appetite for risk. Developments early this year are very illustrative.
Ida Wolden Bache: Central bank digital currency and real-time payments Speech by Ms Ida Wolden Bache, Deputy Governor of Norges Bank (Central Bank of Norway), at Finance Norway's Payments Conference, 5 November 2020. * * * Accompanying charts can be found on the website. Please note that the text below may differ from the actual address. Introduction Chart 1 Changing payment landscape Thank you for the invitation to speak here today. For anyone interested in payment systems, this conference is an important meeting place – and that applies equally to this year’s conference, with its many digital participants. The payments landscape in Norway is changing. Technological advances, user preferences and globalisation are strong driving forces for change, offering opportunities but also posing challenges: How can we ensure the existence of an efficient system for payments in NOK while at the same time safeguarding security? How can we improve the common infrastructure for payment services? How can we best promote competition and innovation? The private sector, organisations and authorities must together and individually work to further develop the payment system. Norges Bank is responsible for promoting an efficient and secure payment system. This is why we are now assessing whether there is a need for central bank digital currency and whether Norges Bank should expand its operational role in real-time payment settlement. This is the theme of my remarks here today. A changing payments landscape Changes in payment patterns have accelerated during the Covid-19 pandemic.