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Bank of Canada By Reuters

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© Reuters. A sign is pictured outside the Bank of Canada building in Ottawa

By Julie Gordon

OTTAWA (Reuters) – The COVID-19 pandemic is accelerating the public’s use of online services and that means the Bank of Canada must move more quickly to research how a central bank digital product would work, a top official said on Wednesday.

The Bank of Canada has been exploring and building capacity for products like a central bank digital currency (CBDC), but there has been no specific time frame for launching one, Deputy Governor Tim Lane said during a panel discussion on the future of money.

“The main point, I think, is this is all looking a lot more urgent because of the speed with which technology is evolving,” said Lane.

“With COVID, we’ve seen an acceleration of the shift of activities online and that suggests if we want to be ready to develop any kind of digital central bank product, we need to move faster than we thought was going to be necessary,” he said.

A digital currency would act like cash and streamline transactions by avoiding a need to use a payment card for online purchases.

Lane has previously said that the Bank of Canada could launch a CBDC if a private cryptocurrency were to make serious inroads, creating privacy concerns.

Global central banks are putting together rules and working on their own digital currencies to address the prospect of private cryptocurrencies, like Facebook Inc ‘s (O:) planned Libra stablecoin.

Lane told the panel that a number of stakeholders need to be consulted on issuing a CBDC, including banks and financial institutions, along with technology companies.

“Certainly we’re talking to a number of companies that have products that they are developing or also are advising in these things,” he said.

On Tuesday, financial leaders of the world’s seven biggest economies said no stablecoin operation should start until it is properly regulated.

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Honda reaches $5 million defective air bag settlement with Arizona By Reuters

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© Reuters. FILE PHOTO: The Honda logo displayed at the 89th Geneva International Motor Show in Geneva

(Reuters) – Arizona reached a $5 million settlement with Honda Motor Co’s (T:) U.S. units Wednesday in a probe into defective Takata air bag systems, state Attorney General Mark Brnovich said.

The settlement follows an $85 million settlement announced in August with nearly all other U.S. states. Arizona said the Honda settlement includes $1.65 million in restitution for state consumers, a $2.13 million repair incentive program, $750,000 for consumer outreach and a $500,000 payment to Arizona.

Faulty air bag inflators have been tied to at least 15 U.S. deaths in Honda vehicles.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Fed’s Mester says policymakers need to watch for financial stability risks By Reuters

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© Reuters. Cleveland Federal Reserve Bank President Loretta Mester speaks in London

(Reuters) – The Federal Reserve’s new approach to monetary policy should help the central bank influence the economy at a time when interest rates and inflation are low, but policymakers need to keep an eye out for financial stability risks, Cleveland Fed Bank President Loretta Mester said Wednesday.

The framework clarifies that strong employment on its own is not a concern to the Fed unless there are strong inflationary pressures or financial stability risks, Mester said. But policymakers also need to remember that low rates could encourage “higher levels of borrowing and financial leverage, increased valuation pressures, and search-for-yield behavior,” she said.

“While monetary policy that leads to a stable macroeconomy encourages financial stability, it is also possible that in an environment with low neutral rates, a persistently accommodative monetary policy could, in some cases, increase the vulnerabilities of the financial system,” Mester said in remarks prepared for a virtual event on monetary policy.

The relationship between low rates and stability needs to be studied, she said. “How best to approach the nexus between monetary policy and financial stability in a low-interest-rate world deserves more consideration,” Mester said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Fed’s Brainard says more fiscal, monetary support needed By Reuters

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© Reuters. Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge

By Dan Burns and Ann Saphir

(Reuters) – Despite a “heartening” early bounceback from the initial hit to the U.S. economy delivered by the COVID-19 pandemic, the recovery has been uneven and will require continued support from the Federal Reserve and fiscal authorities to ensure it becomes broadbased and sustainable, Federal Reserve Governor Lael Brainard said on Wednesday.

Brainard, in remarks to an online conference of the Society of Professional Economists, said the economy’s overall gains since the worst of the crisis mask big disparities among sectors and among Americans that could hold back the overall recovery.

The Fed, she said, is committed to providing “sustained accommodation” to the economy for as long as needed. At the same time, the biggest risk to her outlook for recovery is that fiscal support from the federal government will be withdrawn too soon.

“This strong support from monetary policy – if combined with additional targeted fiscal support – can turn a K-shaped recovery into a broad-based and inclusive recovery that delivers better outcomes overall,” Brainard said.

Brainard’s reference to a “K-shaped” recovery nods to an increasingly popular description of the rebound from the spring’s low point in activity, under which many households and small businesses have seen little improvement.

“Premature withdrawal of fiscal support would risk allowing recessionary dynamics to become entrenched, holding back employment and spending, increasing scarring from extended unemployment spells, leading more businesses to shutter, and ultimately harming productive capacity,” Brainard said.

Among the more troubling developments from the recession caused by the pandemic, she said, are that job losses have occurred disproportionately among minority populations and, more recently, that prime-age working women have left the labor force.

“If not soon reversed, the decline in the participation rate for prime-age women could have longer-term implications for household incomes and potential growth,” she said.

Brainard signaled that the Fed will not only keep rates at their current near-zero level for years, but will, even after liftoff, raise them only gradually to keep rates at levels designed to stimulate economic growth.

The central bank will “have the opportunity” in the months ahead to clarify how the Fed’s asset purchase program could best work in combination with forward guidance on rates, she said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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