For retail use, the motivations in emerging economies are mainly to reduce cash in circulation, or promote electronic payments, foster financial inclusion, and reduce informality and tax evasion. On the other hand, the motivations for wholesale use are mainly efficiency and security. We could also mention cross-border payments as a motivation for either of the two categories as well. In terms of the benefits, I can mention the following: a. Some research indicates that DLT may enhance market efficiency. DLT registers based on real user identities can improve competition, price transparency and liquidity. b. Crisis management around the Zero Lower Bound. In a world of low real interest rates, the impact of unconventional monetary policies, such as QE, nominal GDP targeting and forward guidance, appears to be limited (Blanchard, Dell’Ariccia and Mauro, 2013, Gagnon and Sack, 2018). Fixing negative nominal interest rates in a flexible way could improve the Central Banks’ toolkit (Rogoff, 2019). However, there Page 6 of 11  Central Bank of Chile September 2019  are some drawbacks. The general public could interpret negative interest rates as a new tax and probably legislators would restrict it (Rogoff, 2019). Also, price and wage rigidity can persist, due to habitconsumption, market power, organizational inertia, information frictions. Continuing with the benefits: c. In a world with a widely used CBDC, commercial banks could be smaller/less systemic. CBDCs can give central banks more intervention tools and reduce the risk of runs (Kumhof and Noone, 2018).
Philipp Hildebrand: Principles for sound compensation practices Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Economic Outlook 2009 (Unternehmer NW-Schweiz), Basel, 23 April 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Most financial institutions viewed compensation systems as being largely unrelated to risk management and risk governance prior to the crisis. Short-term profits were rewarded with generous bonuses with little regard to the longer-term risks taken on behalf of the firm to generate those profits. With hindsight, it should therefore be no surprise that these bonuses fueled the excessive risk-taking that has ultimately undermined the global financial system. It is important for the future stability of our financial system that compensation systems be viewed as an integral part of the risk management system in financial firms, and designed and governed with this in mind. The Financial Stability Board (previously the Financial Stability Forum) has drafted a set of sound compensation principles for large financial institutions with exactly this goal in mind. The Principles were endorsed by the G20 leaders at the London summit earlier this month and aim to be widely implemented by the 2009 remuneration round. BIS Review 50/2009  1