By Matthew Scholl – The Director’s Corner will highlight how NIST’s cybersecurity, privacy, and information security-related projects are making a difference in the field and leading the charge to make positive changes.
I believe the greatest accomplishment for the division, and what I am most proud of, is how we work globally — and the way we work in an open, transparent, and inclusive process. This is especially true in the development and standardization of cryptography. This process, coupled with NISTs technical excellence in crypto, results in NIST encryption used by commercial IT products across the world. This underlying encryption enables billions of dollars of electronic commerce to function; such as swiping credit cards at the grocery store — to online purchases — to major financial exchanges.
As we look at 2020 and beyond, NIST will update our encryption standards and ensure that encryption will continue to enable the economy and protect our livelihood. The biggest thing coming in the future (that you will hear more and more about), is in the area of quantum resistant cryptography. NIST is building open, transparent, and inclusive encryption methods with our global partners for new sets of encryption that are needed when quantum computing becomes a reality.
Quantum computing is a completely new method and architecture of conducting computational activity (or way to generate information). When a quantum computer finally is strong enough, some of our current encryption will become vulnerable. Therefore, NIST is proactively working to create new encryption standards. more>
Posted in Business, Communication industry, Economy, Education, How to, Net, Science, Technology
Tagged Business improvement, Cybersecurity, Encryption, Internet, Monetary policy, NIST, Quantum Computing
Funding an ecological transition in Europe via ‘green money’ bonds would be economically justifiable.
By Paul De Grauwe – To what extent can the money created by the central bank be used to finance investments in the environment?
This is a question often asked today. The green activists respond with enthusiasm that the central bank—and, in particular, the European Central Bank (ECB)—should stimulate the financing of environmental investments through the printing of money.
The ECB has created €2,600 billion of new money since 2015 in the context of its quantitative easing (QE) program. All that money has gone to financial institutions which have done very little with it. Why can’t the ECB inject the money into environmental investments instead of pouring it into the financial sector?
Most traditional economists react with horror.
Who is right? It is good to recall the basics of money creation by the ECB (or any modern central bank). Money is created when that institution buys financial assets in the market. The suppliers of these assets are financial institutions. These then obtain a deposit in euro at the ECB, in exchange for relinquishing these financial assets. That is the moment when money is created. This money (deposits) can then be used as their reserve base by the financial institutions to extend loans to companies and households.
There is no limit to the amount of financial assets the ECB can buy.
In principle, it could purchase all existing financial assets (all bonds and shares, for example), but that would increase the money supply in such a way that inflation would increase dramatically. In other words, the value of the money issued by the ECB would fall sharply. To avoid this, the bank has set a limit: it promises not to let inflation rise above 2 per cent. That imposes a constraint on the amount of money which the ECB can create. So far, it has been successful in remaining within the 2 per cent inflation target. more>
Posted in Banking, Business, Economic development, Economy, Education, History, How to
Tagged Business improvement, Capital, Credit, Fiat money, Monetary policy
How to make money on Fed announcements—with less risk
By Dee Gill – Andreas Neuhierl and Michael Weber find gains of about 4.5 percent when investors bought or shorted markets in the roughly 40 days before and after Federal Open Market Committee (FOMC) announcements that ran counter to market expectations. Investors can make money on these “surprises,” even if they did not take positions before the announcements, the findings suggest.
Markets routinely forecast the content of FOMC announcements, which reveal the Fed’s new target interest rates, and usually react when the Fed does not act as expected. An FOMC announcement is an expansionary surprise when its new target rate is lower than the market forecasts and contractionary when it’s higher than expectations.
Share prices moved predictably ahead of and following both types of surprises, the study notes. Prices began to rise about 25 days ahead of an expansionary surprise, for about a 2.5 percent gain during that time. Before a contractionary surprise, prices generally fell. The researchers find that the movements occured in all industries except mining, where contractionary surprises tended to push share prices higher. more>