Future Forum | Bank of England

Submit your questions and ideas now for Deputy Governor Dave Ramsden

by
Future Forum
Future Forum | 3 months ago | in Money, Money, Money

Our Deputy Governor Dave Ramsden will be answering your questions on all things money on 14 November at 13:30.

Submit your own ideas under the Money, Money, Money section and post your questions in the comment section below. He will answer as many as possible during the session and looks forward to chatting with you all.

 

 

 

edited on Nov 9, 2018 by Michelle (BoE Moderator)

Robert Taggart 3 months ago

Does the BoE want Blighty to become an essentially cashless society? and, if it does, what influence or even pressure can it bring about on those companies who are dragging their heels?? (surely the handling of physical cash is more problematical than the processing of data? - could this not be reflected in some kind of penalty for the use of cash in the future??).

Believing CBDC 3 months ago

Your question brings out a flaw in this inquiry about (& limited to) "cash vs commercial digital payments (today)". There are places the kind of physical cash today simply can't reach, such as e-commerce digital transactions. So it's almost an unfair comparison. I think the question should also include what if the cash is digital? Versus digital payments operated by commercial agents?

Believing CBDC 3 months ago

And the perspective should start with benefits to the general public, and not too much wary with commercial agents.

Believing CBDC 3 months ago

Also physical cash can still work alongside CBDC. I think BoE did mention somewhere they'll still field banknotes even when CBDC is issued.

Robert Thornton-Kaye 3 months ago

Cashless transactions provide an excellent opportunity to automatically generate a pdf or other unmodifiable trail to identify where money is coming from and going to. This would be of enormous benefit in combating fraud and the use of dark money in politics. It would also be of great help in reducing mugging, tax evasion/avoidance and organised crime. Would the Bank of England be interested in pursuing this possibility?

Dave Ramsden 3 months ago

Thank you for your question Robert. Please see my response to Sudip below.

View all replies (5)

Believing CBDC 3 months ago

What is your opinion on the necessity to offer a digital cash (or CBDC) to the general public? Noting that all digital payments today are operated by for profit commercial agents, do you see the need to offer the general public a more secure, more private, and more reliable mean for digital payments in our new digitalizing world? Thank you!

Dave Ramsden 3 months ago

Fantastic question, Yen. As I’m sure you’re aware, currently only certain financial institutions can hold electronic central bank money in the form of a reserve account at the Bank of England; the public can only hold money in physical form – as banknotes.

If a central bank issued a digital currency then everyone (including businesses, households and financial institutions other than banks) could store value and make payments in electronic central bank money. While this may seem like a small change, it could have wide-ranging implications for monetary policy and financial stability.

The Bank has an open mind about the eventual development of a CBDC and an active research programme dedicated to it. At this time, it is not clear that any beneficial impact of CBDC on monetary and financial stability would outweigh the risks it could introduce. There are also broader societal questions that others would need to answer – the decision to introduce a CBDC would not be exclusively for the central bank to make.

Whilst we continue our research, the Bank is focusing on ways to deliver more immediate improvements to payments, such as the programme to renewing our Real Time Gross Settlement service.

Believing CBDC 3 months ago

Governor thank you for this comment, you've answered very well. I beg to differ just one issue, which I believe everyone including banks should be able to hold and use CBDC. Banks should be able to take on deposits in CBDC as well as cash. And on top of that banks can also take the reserves. So I think CBDC won't be so bad for banks too. I understand the BoE has to be prudent with the policies, and everything said. Cheers,

View all replies (2)

Robert Thornton-Kaye 3 months ago

Cashless transactions provide an excellent opportunity to automatically generate a pdf or other unmodifiable trail to identify where money is coming from and going to. This would be of enormous benefit in combating fraud and the use of dark money in politics. It would also be of great help in reducing mugging, tax evasion/avoidance and organised crime. Would the Bank of England be interested in pursuing this possibility?

Shelley (BoE Moderator) 3 months ago

Thank you for your question!

Generic user icon
This comment has been removed

Robert Thornton-Kaye 3 months ago

Apologies for the double post. There's no option to delete your posts here. My 2nd question is, given the enormous negative impact on the British economy predicted to be caused by Brexit, will the Bank of England be joining the long list of businesses and politicians calling for a 2nd democratic consultation, aka the people's vote?

Shelley (BoE Moderator) 3 months ago

Don't worry Robert, i will remove your duplicated post for you. Thank you for your second question.

Sudip Chattopadhyaya 3 months ago

It is evident that we are moving towards a cashless society in Europe. In Sweden, less than 1% of the of the value of all payments were made using cash in 2017. Riksbank figures reveal that the average value of Swedish krona in circulation fell from around 106 billion (£10bn) in 2009 to 65 billion (£6bn) in 2016. In the UK, the trend in banknote in circulation is opposite : from 3.4 billion BoE Notes worth about 64 billion pounds in 2016 it grew to 3.6 billion BoE notes worth about 70 billion pounds.

The UK's payment markets tend to evolve slowly over time as we are creatures of habit when it comes to the methods we use to make and receive payments. In 2017, debit cards overtook cash for the first time as most frequently used payment method in the UK mainly due to the growing popularity of contactless payments. Despite the falling volume of cash payments (decline of 15% in 2017), it was still used for over a third (34%) of all payments in 2017. The use of cash as a % of all payments has halved in the last decade from 61% in 2007 to 34% in 2017.

In light of the above, find below my questions :

1. In your opinion, how are you going to combat the impact of cashless society upon the vulnerable sections of the population : the elderly, people without bank accounts who will feel further disenfranchised from the cash infrastructure that previously supported them, former convicts, immigrants? Given the fact that the UK household deficit is around £25bn and the unsecured credit has increased to a record level of £205bn, do you estimate that there is any correlation between payments habit in cash encouraging self-control while paying by card or mobile phone which could encourage further spending?

2. What are the initiatives of BoE to manage and mitigate the increasing risks of centralised payment networks crashing or being hit by cyber terrorism impacting the ability of millions of consumers to transact and pay to acquire basic services on a daily basis? Do you effectively supervise the volume and frequency in which the cash machines are being shut down by the banks in the UK so as to minimise this risk?

3. In 2016, the Indian government banned 500 and 1,000 rupee notes in an effort to demonetize purportedly with a view to crackdown the criminals of money laundering. This move was criticised as the implementation being rushed and controversial, and roughly 99% of those banknotes were deposited. The downstream impact on the consumers were significant disrupting the payment abilities of millions of citizens who were outside the traditional infrastructure of banking.

In your opinion, do you think the principal reasons to encourage restrictions on payments in cash or drive towards a cashless society are "to crack down on the minority who use cash to evade tax and launder money"? (HM Treasury Call for Evidence : Cash and digital payments in the new economy; March 2018)

4. How do you respond to the following arguments :
- Paying in cash is an essential personal freedom.
- Restrictions on payments in cash could distort competition or create obstacles to
trade in the internal market?

Thanks for your time and attention.

Best regards.

Shelley (BoE Moderator) 3 months ago

Thank you for your very detailed response and questions. Some very interesting points and I will look forward to Dave's response.

Dick Rodgers 3 months ago

Dear Mr Ramsden

Dick Rodgers 3 months ago

Dear Mr Ramsden, I be glad of you response to my observation urging the creation of stetling only by public authority ie by BoE instead of by commercial banks.. Which I posted a few days ago.

Dave Ramsden 3 months ago

Thank you for your questions.
On your first question, we believe that is it important that the public has choice in the way that people choose to pay for transactions.
The UK has seen a decline in the use of cash. However, we also think that cash will remain a critical part of the payments landscape for the foreseeable future.
It is true that an unmanaged decline in cash use could create financial inclusion challenges and limit choice for people and businesses who prefer to use cash. In this regard, part of the Bank’s role involves considering how cash distribution structures might evolve in the UK as the cost of processing cash increases. Working with other authorities and industry to ensure that the system for distributing cash remains resilient and efficient for as long as is deemed appropriate is therefore an important priority.

Dave Ramsden 3 months ago

On your second question, the Bank supervises systemically important payment systems so they operate in a way that is robust and resilient. The Bank’s recently published operational resilience discussion paper drives forward debate on continuity of critical business services, such as payments, so even if an incident occurs firms should be thinking about how they can keep important functions going.

https://www.bankofengland.co.uk/prudential-re...iscussion-paper

View all replies (5)

James Manson 3 months ago

Could you please shed some light on the Bank of England's strategy with regards to the ECB's "TIPS" protocol going live at the end of this month, please? See link below for more details....

https://www.ecb.europa.eu/paym/target/tips/html/index.en.html

Are we (the U.K.) to be left behind, while the EU's economy flourishes under the ILP's success?

If not, then when should we expect the U.K's own CHAPS update/incorporation/interoperability onto the ILP?

We all know that a no deal Brexit is on the horizon, so the U.K's access to TIPS/SEPA etc will no doubt be adversely affected.

Any thoughtful input/reassurance would be greatly appreciated.

Shelley (BoE Moderator) 3 months ago

Thank you for your question. Dave will be responding to all questions on 14 November - please come back to see a response.

James Manson 3 months ago

Hi Shelley,

It is now the 16th? Perhaps our questions aren't worth answering?

Regards

James

Florence (BoE Moderator) 3 months ago

Thank you very much James for your time in setting out your questions to our Deputy Governor Dave Ramsden, including references.

James Manson 3 months ago

Hi Florence,

It is now the 16th? Perhaps our questions aren't worth answering?

Regards

James

Future Forum 3 months ago

Hi James, sorry Dave didn't get round to answering this. I know you have been in touch with the our Enquiries Team and they will get back to you regarding this.

View all replies (5)

m__doon 3 months ago

Under an assumption that commercial-bank money will almost completely dominate the retail payments landscape in let's say ten years from now - what do you think central bank balance sheets will look like when there are so few bank notes required? What do you think will happen to the concept of seignorage? And how do you see such a scenario impacting the frameworks of central banks with mandatory reserve requirements? Thanks!

Shelley (BoE Moderator) 3 months ago

Thank you for your question, interesting thoughts! Check back on the 14 November for Dave's response!

Dave Ramsden 3 months ago

Hi m_doon. Thank you submitting your question. We take a keen interest in this topic. We published a Discussion Paper on the Bank of England's future balance sheet back in August. We will share our findings on this in due course.

https://www.bankofengland.co.uk/paper/2018/bo...-interest-rates

m__doon 3 months ago

Thank you!

View all replies (3)
Generic user icon
This comment has been removed

Ramblingsofabard 3 months ago

There are several groups raising concerns that the big shift to cashless society is actually a way for the government and big corporations to monitor consumers better and have full surveillance on their spending and earnings. What is the BoE response to that? And while intentions maybe innocuous, a fully digitised payments world does present an opportunity for misuse from an authoritarian regime to exploit individual privacy. What measures can be introduced to allow a move towards the modern way of payments without comprising privacy?

Believing CBDC 3 months ago

Technology option do exist, and can, enable digital implementation of very closely cash-like CBDC - in terms of the privacy. It is actually available & possible to do a genuinely P2P digital cash - fully free from third-party transparency - and can support varying degrees (policy dependent) or levels of privacy, from pseudonymity with implied identity links to very close approximation of anonymity. (This is NOT implying the Bitcoin class of blockchain type solutions - which is infeasible for CBDC. I had previously commented in another post about this. But I don't want to look like I'm making a sale here. So I won't mention any names.)

But of course no matter how closely anonymous a piece of digital data can be, the data will always exist for every action taken (though GDPR may offer the mandate necessary to require the data be made untraceable). Physical cash is probably still the ultimate privacy, and it is one of the most endearing privilege & liberty valued by free societies. So I agree we probably shouldn't let physical cash disappear even when CBDC is near perfect.

Watch & follow the Sveriges Riksbank, they're probably the one to field CBDC (e-krona) first.

Ramblingsofabard 3 months ago

Thanks Yen, will check it out. I’m a skeptic of CBDCs as I feel we are forcing them in, rather than there being a need for them. But will check Riksbank videos

Believing CBDC 3 months ago

Utility or functionality wise, CBDC probably would be no different from all the myriads of digital payments offered by commercial agents today. But it would be safer money for the economy as it's direct from central banks. It's also not likely commercial payment platforms will adopt true P2P or anonymity, as they'll risk loose revenue & controls. Central banks don't need to make a profit. So CBDC can definitely use high privacy solutions. So it just makes more sense (for the general public) - for CBDC - as the (or part of the) next generation digital payment infrastructure.

Shelley (BoE Moderator) 3 months ago

Thank you for submitting your question!

Ramblingsofabard 3 months ago

Thanks Yen, a few clarifications though. Any digital currency without a linked conversion to some form of purchasing power is useless. As it stands, all digital currencies tie their way back to fiat money, one way or the other. What I am interested to know is, how does having the same central bank backing work better when it’s a digital currency and not the traditional banking system. To me, both are distribution mechanisms for the central supply. I’ve seen your question on the page, so look forward for the deputy governor to respond.

Believing CBDC 3 months ago

Thanks for the comments Ramblingsofabard. Commercial bank or private financial institution money are different from central bank money. For example lots of the money are credits, credits are lot bigger than base money these days (FRB), many times bigger. Try factor in derivatives and you'll be shocked. So it's dangerous for the economy without fundamental central bank presence. It's hard to explain in a few lines. But Simon Youel had just compiled a very good perspective:
https://bankofenglandfutureforum.co.uk/post/630209?forPhase=23041
Other than I don't think opening up the reserve account for everybody is the best option, I agree with most the views and highly recommend reading.
If you have interest to read more, some of the best works, IMHO, are definitely from the Riksbank:
https://www.riksbank.se/en-gb/payments--cash/...oject-report-2/
Cheers,

Dave Ramsden 3 months ago

This is a really interesting thread and touches on a number of the topics within our CBDC research agenda at the Bank of England. We're also following the work of the Riksbank with interest.

View all replies (7)

Simon Youel 3 months ago

Given that QE served to massively inflate the wealth of the asset-rich, wouldn’t it be better for future stimulus to be designed in a way which has a far more equitable distributional impact? Wouldn’t policies like ‘helicopter money’, in which each citizen receives an equal amount of newly created money regardless of their asset wealth, be a much fairer, more democratic and more sustainable means of boosting the economy than relying on QE to further inflate asset bubbles?

Shelley (BoE Moderator) 3 months ago

Thank you for submitting your question. Check back tomorrow to see Dave's response and comments.

Simon Youel 3 months ago

As access to physical cash declines shouldn’t the Bank of England provide the public with the option to access digital cash through accounts at the central bank, rather than being forced to rely on private banks who thus receive tens of billions of pounds worth of implicit subsidies each year through deposit protection and seigniorage?

Shelley (BoE Moderator) 3 months ago

Thank you for your second question

Dave Ramsden 3 months ago

Hi Simon, central bank digital currency is an interesting concept that we, at the Bank, have an open mind about and an active research agenda looking into. We've published a couple of papers looking at the possible strengths and weaknesses of CBDC, linked in case you haven't seen them. See also my response to Yen above.

https://www.bankofengland.co.uk/working-paper...igital-currency

https://www.bankofengland.co.uk/-/media/boe/f...88C912A721B1DC1

View all replies (2)

Dave Ramsden 3 months ago

Hello! Looking forward to responding to your questions on Money, Money, Money - I will get to as many as I can. To get me primed for this session, I have been taking part in the cash vs. cashless challenge. I'm interested to hear how you found it and I'll be posting about my experience on that page later.

Heather Fringe 3 months ago

Hi Dave, I was interrested to take part in this challenge too. I usually use cash because it helps me stick to my budget and I was worried I would spend more easily if if I was using my card. I will admit it is easy to use a card, it was accepted everywhere I went, and I didn't have to worry about dropping any money. In the end, I did end spending a bit more than my budget, but not as much as I expected. In many ways a card is more convenient, but I think I still like cash.

Nadya Petrof 3 months ago

Do I leave more money in my pocket, if I choose to payout my mortgage with cash, (assuming the BOE sticks to 1 hike per year policy)?

Ian Collier 3 months ago

It may be some years before we as a nation go totally cashless, but as a warning, when events happen, they tend to happen quickly.
De-cashing (the reduced use of cash) is happening and will continue to happen, probably at a rapid rate.
What is the Bank proposing to do to help those who find it difficult to understand and utilise non-cash payments. With less cash usage, the unit cost of providing cash will surely rise and unless there is a subsidy by those handling cash, those currently disadvantaged and financially excluded will only dee their positions deteriorate.


I believe that the Bank and government should be planning for this and help those currently disadvanged from being further disadvantaged. What are you planning to do?

Shelley (BoE Moderator) 3 months ago

Hi Ian, This was yesterday and it is now closed. We do have Sam Woods session tomorrow or Jo Place on Monday if you wish to direct your question to them?

Amy Buckingham 1 month ago

This idea has been advanced to the current phase

Share