That would, in turn, fuel the negative effects on the capacity for recovery and medium-term economic growth. Thus, March 2021 saw the approval of an aid package for the corporate sector and the self-employed that could be a useful tool. Indeed, this instrument could specifically reduce the risk of the pandemic triggering the closure of those firms and businesses that are particularly stressed as a result of its effects, but which remain viable. In this connection, it is particularly important that the package be implemented swiftly and consistently, and that the allocation mechanisms allow this aid to be targeted specifically at viable firms experiencing solvency problems. Flexibility is also required as regards the volume of earmarked funds. These ought to be adapted in line with how the pandemic unfolds and whether or not the risks materialise. In the case of non-viable firms, winding-up processes would have to be expedited in order to prevent them from consuming resources that could be more beneficial in other activities. As I mentioned earlier, these economic policy measures would help prevent the crisis from taking on a financial crisis complexion that may make it a lot more persistent. Thus, the banking sector could continue to be part of the solution to the crisis, as it has to date, by lending to households and firms and helping reactivate the economy when the pandemic is over. For this, a smoothly functioning credit channel — of such importance in European economies and, of course, in the Spanish economy — will surely be required.
These developments could have significant implications, including for financial stability, national security interests, and international cooperation. In my role as manager of the Federal Reserve’s System Open Market Account, I am looking at these issues from the vantage point of monetary policy implementation. And in my remarks today, I will discuss some key issues that digital innovation in money and payments raises for policy implementation. In particular, I will examine how digital currencies might impact interest rate control and central bank balance sheets. In the spirit of this workshop, I won’t speak to the U.S. context specifically, but rather intend to discuss conceptual issues for policy implementation across jurisdictions. And, I won’t take a position on regulation, design choices, or a preference for a private or public solution. As always, the views I express today are my own, and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.1 Private and Public Innovation I would like to start by describing two types of monetary instruments that could, in the future, be significant for policy implementation. In the private sector, a broad range of digital assets are emerging.