Putting climate scenarios into action Sarah Breeden shares lessons we have learned from designing and applying climate scenarios, as well as some thoughts on their future, including the vital contribution research needs to make CBDC in an historical perspective Monetary transformations through history have been driven by changing technology and the demands to effectively satisfy the functions of money. Michael Bordo argues that technological change is inevitable Better sustainability data needed To accelerate the low-carbon transition in capital markets investors need trustworthy sustainability data. Alexander Lehmann says regulators should remain alert to misconduct in capital markets

Finance ePub

Is ‘crypto’ a financial stability risk? Jon Cunliffe looks at the impact of ‘crypto’ on the stability of the UK’s financial system and asks whether the world of ‘crypto finance’ poses risks to financial stability Finance disrupted New technologies are disrupting every corner of the financial sector. Benoît Coeuré focuses on the role that central banks are playing in ensuring that technological innovation is a force for good
Monetary policy during an atypical recovery The economy is back from the brink, but not completely out of the woods. Christine Lagarde says the euro area is going through a highly atypical recovery Monetary arithmetic and inflation risk The balance sheets of the ECB, BOJ and the Fed increased sevenfold between 2007 and 2020. Marek Dabrowski believes a continuation of asset purchasing involves the risk of higher inflation
The hard yards Andrew Bailey looks at the varying forces currently acting on the British economy and what they mean for monetary policy The inherent value of IFCs toward more sustainable finance IFCs facilitate the efficient flow of capital required by the global economy. Phil Graham argues that they are ready to support the transition to sustainable investing
The green transition, finance and diversity: aim high, shoot higher René Karsenti and Apostolos Thomadakis argue that financing the energy transition requires a comprehensive shift in how the financial system works Can climate change be tackled without ditching economic growth? Klaas Lenaerts, Simone Tagliapietra and Guntram B Wolff explore whether decarbonisation and economic growth are compatible to reach net zero by 2050 Public finances in the EU COVID-19 has led to governments borrowing at unprecedented levels. Mehmet Burak Turgut discusses EU government finances as well as relevant policy priorities to ensure healthier public finances in the future The impact of fintech on central bank governance Central banks are facing unprecedented technological transformation. Marianne Bechara, Wouter Bossu, Yan Liu, and Arthur Rossi consider the key legal issues central banks face from fintech on their governance Free trade under Brexit Many economists have claimed that Brexit would damage the UK economy. Patrick Minford considers the assumptions made and Brexit benefits to the UK have been widely underestimated COVID-19 lessons from Nigeria The pandemic has had severe impacts on Nigeria. Mma Amara Ekeruche and Adedeji Adeniran examine the macroeconomic policies adopted and what can be learnt by other developing economies A solution in search of a problem? The payment system is changing in profound ways. Christopher Waller focuses on whether a CBDC would address any of the problems affecting payments Regulating crypto assets Crypto assets and blockchain technology have triggered a huge debate. Daniel Dăianu believes that updating the current regulatory framework is a must for governments and central banks
SPACs in the gap Rebecca Christie considers special-purpose acquisition vehicles, and believes they could fill a gap in European equity markets and lure risk-averse investors off the sidelines A new asset class Alexander Lehmann says the proposed EU green bond standard will be less prone to ‘greenwashing’, and the widest possible set of issuers and jurisdictions should be encouraged to use the standard
The battle for the soul of the financial system Stephen Cecchetti and Kim Schoenholtz argue that we don’t need CBDC to solve financial system problems, and hope that central banks stop short of a universal, elastically supplied, interest-bearing digital currency Regulatory divergence or parallel tracks? Alexander Lehmann writes that post-Brexit UK bank regulation is not likely to compromise on international standards, but will place greater emphasis on competition, making close UK-EU dialogue essential
Parachute pants and central bank money There is a global rush to roll out CBDCs. Randal Quarles suggests this is akin to the 1980s parachute pants fad and the fear of missing out The geopolitical relevance of CBDCs CBDCs could be useful as a means for central banks to record transactions in an increasingly cashless economy. Brunello Rosa and Alessandro Tentori consider the case of China
A new dawn for payments Victoria Cleland talks about the evolution of payments systems in the UK, the role of the RTGS, and says the payments industry must work together to build a payments infrastructure for future generations The future of cryptocurrencies Cryptocurrencies have foreshadowed a potential digital future for money. Graham Bright sees blockchain as an enabler in the growth of the financial system and digital money
Tackling climate for real: progress and next steps Andrew Bailey talks about the work central banks have done on climate change, and how it will need to evolve The BVI fintech transformation From a traditional financial services centre to a global fintech hub, Simon Gray charts the emergence of the BVI as an innovation and investment hotspot across the fintech and digital space
Private money and central bank money as payments go digital Technology is driving dramatic change in the US payments system. Lael Brainard provides an update on CBDCs and a digital dollar Stablecoins: what's old is new again Christina Segal-Knowles talks about stablecoins. She looks at how they could be regulated if they are used as a form of payment A new template for the European fiscal framework The European fiscal rules have been suspended to enable member states to combat the COVID crisis. Martin et al argue this is an opportunity for ambitious reform of a now clearly outdated fiscal framework Towards a green capital markets union Christine Lagarde considers the European Union’s transition towards a sustainable economy that will be backed by the growth of sustainable finance Do we need ‘public money’? The Bank of England has issued banknotes for over 300 years. Jon Cunliffe talks about future of money in the UK in an increasingly digital world Central banks in a shifting world Philipp Hartmann and Glenn Schepens provide selected takeaways from the ECB’s Sintra Forum, including whether globalisation is reversing and the role of fiscal policy for the post-COVID recovery The conflict between CBDC goals and design choices Central banks have a growing interest in digital currencies. Antonio Fatás argues that CBDCs alone will only achieve an inclusive payment system if they ensure competition Public support for private innovation Dave Ramsden talks about how the Bank of England supports the safe development of fintech services through monetary and financial stability Time to reset? Giovanni Tria and Angelo Federico Arcelli ask is a renewed Bretton Woods agreement a concrete option to favour a new economic expansion phase in the post-pandemic world? Digital assets and Africa The long-term economic outlook for Africa is positive. Elise Donovan examines the enormous potential and the opportunities for wealth creation What the British government needs to do to get Brexit done post-COVID Patrick Minford considers the options available to the UK government to ensure a successful Brexit Will 2021 in CEECs look better than 2020? Mehmet Burak Turgut is optimistic about CEE growth in 2021 following the successful development of COVID vaccines Digital currencies and the future of the monetary system Does the economy need digital currencies? Agustín Carstens asks who should issue them, how should they be designed and what are the implications for the monetary system? The Brexit dust begins to settle The phase of greatest Brexit-related uncertainty for the European financial sector ended on 1 January. Nicolas Véron believes it is increasingly apparent that London will be less dominant than before Digging for gold Giulio Cornelli, Sebastian Doerr, Leonardo Gambacorta and Ouarda Merrouche discuss how regulatory sandboxes help fintechs raise funding CBDCs risk becoming a gigantic flop CBDCs are increasingly being discussed, but with little focus on their fundamentals. Peter Bofinger and Thomas Haas consider the design options Climate change and central banking The ECB will contribute within its mandate to tackling climate change, acting in tandem with those responsible for climate policy, says Christine Lagarde The digital age Graham Bright gives his thoughts on the digital challenges facing financial institutions post-crisis Four cornerstones of payments in the digital age Kristalina Georgieva says the IMF stands ready to help foster a more resilient monetary system – one that is more inclusive, smarter, and greener From the payments revolution to the reinvention of money The digital transformation is triggering a revolution in the financial sector, which will bring innovation but also risks, says Fabio Panetta. The ECB strategy provides a forceful policy reaction Embracing digital innovation Simon Gray discusses the benefits of embracing digital innovation to help drive economic recovery Digital money and financial stability Tao Zhang considers the implications for monetary and financial stability of new forms of digital money Seizing the opportunities from digital finance Developments in digital finance could transform how consumers and businesses make payments and raise finance. This could help revitalise the UK economy, says Andy Haldane Monetary policy in a pandemic emergency Europe successfully absorbed the shock of COVID-19. Christine Lagarde says the second wave presents new challenges and risks, but the blueprint for managing it is the same The two sides of the (stable)coin Global stablecoins signal the need for change, but they can pose serious risks, says Fabio Panetta. We should remain open to global competition to foster innovation and be prepared to make the most of it Building financial security COVID-19 has exacerbated a challenging financial situation. Cosmina Amariei says it is paramount to strengthen the EU policy framework for retail investors A new Bretton Woods moment The COVID crisis has created economic calamity. Kristalina Georgieva argues that now is the time to build a more sustainable and equitable world Innovating in a changing world Victoria Cleland says faster, cheaper, more transparent, and more inclusive cross-border payment services will have widespread benefits by supporting economic growth, international trade and global development The road ahead Jerome Powell assesses recent economic developments and discusses the path ahead for the US economy post-pandemic Avoiding economic anxiety Andy Haldane looks at the UK’s recovery from the economic impacts of COVID-19, and says it’s important not to be over-pessimistic because there has been greater robustness and resilience than expected They don’t need to be green The EU needs a liquid market in bonds to fund the recovery programme. Alexander Lehmann argues green bonds would complicate matters Limits and pitfalls of QE in emerging markets Daniel Dăianu considers the use of quantitative easing to mitigate the effects of the pandemic, and argues that there are constraints for emerging markets Reinventing the wheel (with more automation) Andrew Bailey looks at recent innovations in payments and the challenges they bring, reiterating the Bank of England’s interest in CBDCs and stablecoins The coronavirus crisis: prospects and policy The COVID-19 crisis is unusual in that it was deliberately created by the government. Patrick Minford argues that the right policies will ensure a total recovery Using technology for trade COVID-19 has had a drastic effect on global trade. Graham Bright discusses how technology can boost the recovery Europe needs a fully-fledged CMU The coronavirus crisis makes progress on CMU even more important. Luis de Guindos, Fabio Panetta and Isabel Schnabel outline priority areas for reform to foster European capital markets Financing the EU: new context, new responses Clemens Fuest and Jean Pisani-Ferry consider the EU budget, which has to be reassessed in light of the Next Generation EU programme The challenge of climate finance Alexander Lehman and Mark Plant discuss low-carbon transition challenges and consider the EU agenda for coordinating with emerging markets Blockchain: a catalyst for change? Mark Legard believes that blockchain will be a catalyst for change, and we will all reap the benefits New economic challenges and the Fed’s Monetary Policy Review The understanding of the economy has evolved in ways that are central to monetary policy. Jerome Powell says it is time for pro-growth policies, and softens the Fed’s approach to inflation Is the market prepared? The SCA deadline is nearing. Marius Galdikas says the need to adapt will be a watershed moment for businesses The future of retail payments in the US Lael Brainard remains optimistic about the power of technology and innovation to deliver payments safely, immediately, and efficiently when the appropriate safeguards are in place Time inconsistency in recent monetary policy The last decade has seen a continued accumulation of debt. Charles Goodhart, Tatjana Schulze and Dimitri Tsomocos argue that the fundamental issue of the effects of ‘low for longer’ on the resilience of our wider financial structure remain How to prevent the looming sovereign debt crisis There is a looming global debt crisis. Joseph Stiglitz and Hamid Rashid propose an IMF-managed multilateral sovereign debt buyback would prevent a debt crisis The microeconomics of cryptocurrencies Hanna Halaburda, Guillaume Haeringer, Neil Gandal and Joshua Gans summarise the main research findings to establish a base for future research The old and the new of fintech Arnaud Boot, Peter Hoffmann, Luc Laeven and Lev Ratnovski argue that technological innovations may lead to changes in the traditional bank business model The global and Asian economic outlook Tao Zhang considers the economic consequences of the COVID-19 pandemic, and says we need to work together to ensure a green and sustainable future Deeper recession, wider divergences Maarten Verwey and Björn Döhring consider the Commission’s Summer 2020 interim forecast, and argue that a rapid response at the EU level is needed to minimise hysteresis Sustainable finance in the COVID-19 era The current crisis has given a reminder about the need to strengthen our societies. Cosmina Amariei argues that sustainability will remain an enduring policy in the (post) COVID-19 era Global Ripple Supplier of Choice and Best Ripple Partner Graham Bright explains how Ripple ensures and guarantees delivery directly into the recipient account, without the cost and time overheads of bank correspondent relationships Payments after the COVID crisis Christina Segal-Knowles considers how payments were changing well before COVID-19, and explores the role of digital currencies and emerging issues and challenges Digital transformation: what can banks learn from other sectors? Established banks see digital transformation as a top priority to help them counter disruption. Paul Jones considers how banks can succeed A common eurobond market in sight Vítor Constâncio, Karel Lannoo and Apostolos Thomadakis argue that the Next Generation EU proposal has given a boost to a eurobond market, European capital markets, eurozone stability and the international role of the euro An uncompromising budget The EU response to the COVID-19 crisis has so far been weak. Zsolt Darvas considers the Next Generation EU proposal, and feels that an opportunity has been missed to reform the EU budget A small step forward Grégory Claeys argues that the EU's SURE plan to safeguard employment is too modest to have a significant impact the COVID-19 crisis Designing central bank digital currencies Payment systems and money are evolving rapidly. Itai Agur, Anil Ari and Giovanni Dell’Ariccia consider the implications of CBDCs An ECB digital currency – a flight of fancy? Most central banks are working on CBDCs. Yves Mersch outlines the preparations the ECB is making should the European people embrace digital currencies Save markets to save the single market It’s time for the EU to make quick and indispensable progress in forming a capital markets union, Maria Demertzis writes The EU’s financial readjustment Rebecca Christie and Thomas Wieser consider the EU post-Brexit reckoning with financial markets, and argue that time is of the essence to create highly integrated, functional and fair financial and capital markets Banking regulation in the euro area: Germany is different Nicolas Véron considers the extent to which the COVID-19 pandemic may influence future debates and decisions on the still-unfinished banking union The revived centrality of the G20 COVID-19 has wrought economic havoc. Suman Bery and Sybrand Brekelmans consider the return of the G20 as a driver of global economic policy Libra still needs more baking The Libra Association has updated its White Paper. Barry Eichengreen and Ganesh Viswanath-Natraj argue that much more needs to be done Managing the winds of change Technological innovations are transforming the financial sector. Johannes Ehrentraud and Denise Garcia take stock of the policy responses to fintech developments Is the US reneging on international financial standards? Nicolas Véron considers the new Fed rule, which he argues undermines the global order without being justified by narrower considerations of US national interest Monetisation: do not panic The response to the COVID-19 shock have raised fears that major inflation could follow. Olivier Blanchard and Jean Pisani-Ferry clarify the discussion Doing more with less The COVID-19 pandemic has sparked fears of a next wave of emerging market debt crises. Tobias Krahnke considers how the IMF should respond to an emerging markets crisis Globalisation and financial contagion: a history Olivier Accominotti et al suggest that the COVID-19 pandemic could lead to a revaluation of the international trade and finance system Watching out for the third pandemic: a massive debt-crisis... COVID-19 is having a profound affect on the global economy. Deepanshu Mohan considers the consequences of increasing debt on countries such as India The ESM can finance the COVID fight now EU member states are debating how to finance the fight against COVID-19. Aitor Erce, Antonio Garcia Pascual and Ramon Marimon argue that using the ESM to provide the funds needed is a workable way forward The great distortion Patrick Minford argues that the traditional orthodoxy of fiscal caution is dangerous in today’s zero interest rate world Climate change and the financial sector Climate change constitutes a major challenge. Christine Lagarde writes that central banks need to devote greater attention to its impacts Ahead of the GAME WCR sat down with Euro Exim’s Graham Bright to talk about the $22 trillion cross-border payments market, the disruptive effects of technology and how regulators will respond Open source – and why it matters in financial services The financial sector is being transformed by digital technologies. Mark Hermeling considers how open source software is driving the transformation Transforming financial services Disruptive technologies are turning the financial sector upside down. Jonathan Sharp says now is the time to embrace digital transformation to improve customer services, productivity and revenues What does the future hold for Facebook Libra? The move to bring more affordable transactions to the masses may have been well-intentioned, but Christoph Strnadl believes the future of Libra is in doubt Governance of financial globalisation Jon Cunliffe sets out the progress that has been made and the challenges to be faced around the governance of financial globalisation
The digitalization of payments and currency Technology firms are driving the digital transformation of payments. Lael Brainard examines some issues for consideration
Climate risks to European banks Alexander Lehmann looks at a new era of stress tests that take into account potential climate-related risks Digital money and central bank digital currency Dirk Niepelt argues that it has become clear that for central banks that maintaining the status quo is not an option The future of fiscal rules in the euro area Creating a central fiscal capacity is one of the three critical unfinished jobs to complete the euro area architecture, Vitor Gaspar argues Libra as a currency board: are the risks too great? The Libra Association claims it will be analogous to a currency board regime. Julia Anderson and Francesco Papadia write that they have overlooked the problems of monetary management that come with it From vision to legislation In fighting anti-money laundering the European Commission should act fast toward creating a European anti–money laundering supervisor, Nicolas Véron and Joshua Kirschenbaum argue Responding to leaps in payments: from unbundling to stablecoins Christina Segal-Knowles looks at the future of regulation in the payments industry, including how the financial system responds to innovations such as stablecoins Central banks and climate change Central banks have been called on to fight climate change. Markus K Brunnermeier and Jean-Pierre Landau present a framework for thinking about the issue and identifies some major trade-offs and choices Riding through the storm Marco Buti draws the main lessons out of five key moments in the euro crisis for the completion of EMU and the appropriate policy mix in the euro area An existential threat There is mounting evidence of the damage caused by climate change. Daniel Dăianu says policymakers and central banks need to be increasingly concerned
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