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

Finance ePub

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 Backing the future World Commerce Review sat down with Simon Gray to discuss the role of the British Virgin Islands in keeping the wheels of global trade and investment turning Financial innovation for inclusive growth The benefits of financial innovation should be available for all. Luis de Guindos outlines a European approach that is fit for the global challenges ahead A major step toward combating money laundering Combating money laundering in Europe took a momentous step with finance ministers putting forward a joint proposal. Nicolas Véron and Joshua Kirschenbaum say that this paves the way for strong EU legislation The future of the euro area economy Europe needs to strengthen common institutions and empower the European economy to respond to today’s challenges, says Christine Lagarde. This would be a game changer for Europe’s stability and prosperity and for that of the global economy, too Limits of the ‘Brussels effect’ The EU model of financial market regulation is increasingly copied by third countries. Alexander Lehmann considers bank regulation in the European Union neighbourhood Anti-money laundering and combating the financing of terrorism AML and CFT are high on the agenda of policymakers at both the European and global levels. Yves Mersch considers recent initiatives and the role of the ECB A challenging path ahead Reuben Borg, Marco Buti, Oliver Dieckmann, Björn Döhring, and Alexandru Zeana consider the European Commission’s Autumn 2019 forecast A digital euro to save EMU Relaunching the euro as digital central bank currency could help reduce the debt of the euro states and end the sovereign-bank doom loop, Thomas Mayer argues Monetary policy and open questions in international macroeconomics Silvana Tenreyro considers some long-term issues in the global economy, focusing on three ideas that have dominated the policy and academic debate in the years since the 2008 financial crisis The world turned upside down Little has changed since the 2008 financial crisis. Mervyn King considers economic policy in turbulent times, and argues that the global economy needs to reform Synchronized slowdown, precarious outlook The global outlook remains precarious. Gita Gopinath believes that countries need to work together because multilateralism remains the only solution to tackling major issues Digital currencies, stablecoins and the evolving payments landscape Lael Brainard considers the history of technological advances challenging what money is, and looks at the next chapter in the payments landscape The international role of the euro The euro is 20 years old. Poul Thomsen considers what can be done to further strengthen the role of the euro as an international reserve currency Payments: a platform for innovation Victoria Cleland writes about the work of the Banking, Payments and Innovation team at the Bank of England, in particular looking at what they are doing in response to the recommendations of the Future of Finance report TCFD: strengthening the foundations of sustainable finance Mark Carney says the financial sector must help the transition to ‘net zero’ (a neutral carbon footprint). Businesses need to keep improving their disclosure of climate risks The FSB at 10 years—looking back and looking ahead Randal Quarles considers the success of the FSB and looks ahead to the new challenges, such as fintech, shifts in financial globalization and integration, and increasing nonbank financial intermediation How to stabilise the euro area We need more supportive fiscal policy alongside monetary policy for a faster return to price stability with fewer side effects, says Mario Draghi. Acting too late leads to a longer period of accommodative policies The emergence of big tech in financial intermediation Big tech firms are entering finance. Jon Frost, Leonardo Gambacorta, Yi Huang, Hyun Song Shin and Pablo Zbinden assess the economic forces behind the adoption of big tech services in finance Libra paves the way for central bank digital currency Dirk Niepelt argues that while we may be witnessing a seismic shift in the monetary system, Libra’s role in that shift will be an indirect one Hybrid and cybersecurity threats Maria Demertzis and Guntram Wolff find that EU finance ministers should advance a broader political discussion on the integration of the EU security architecture applicable to the financial system Money and private currencies: reflections on Libra The link between money and trust has lost none of its relevance. Yves Mersch considers Libra and calls for a global regulatory and supervisory response to mitigate risks The rise of digital currency Digital payments can bring significant benefits to customers and society. Tobias Adrian and Tommaso Mancini-Griffoli argue that accompanying risks should also be tackled Challenges for monetary policy The US economy is in a favourable place. Jerome Powell describes how the Fed is working to sustain these conditions in the face of significant risks The benefits of a global digital currency There have been negative reactions to the Libra cryptocurrency. Antonio Fatás and Beatrice Weder di Mauro argue that whilst a digital currency provided by central banks may be preferable, a private version would offer similar benefits The growing challenges for monetary policy Mark Carney considers the challenges posed by the international monetary and financial system for the conduct of monetary policy across the world The structure of global trade finance Banking and liquidity problems can have far-reaching consequences on global trade. Olivier Accominotti and Stefano Ugolini take a very long-run view and reconstruct the evolution of trade finance Who are you going to believe, me or the evidence of your own eyes? Joseph Stiglitz, Martine Durand and Jean-Paul Fitoussi argue that if experts are perceived as wrong it’s inevitable that they stop believing them, and the politicians they advise, and look for answers elsewhere Productivity and competitiveness in the euro area: a view from France Agnès Bénassy-Quéré et al explain why current account imbalances in the euro area are both a sign of deficient adjustment mechanisms and a cause of concern Possible risks in Facebook’s pursuit of a ‘stablecoin’ Facebook’s new cryptocurrency has the potential to be attractive to those countries that do not have strong sovereign currencies. Maria Demertzis and Jan Mazza write that regulators have so far treated cryptocurrencies as a minor risk to national economics, but Libra could change everything The incoming payment revolution and the future of central banking Maylis Avaro and Vincent Bignon consider the lessons from the history of the Banque de France on financial instability and the payment revolution Managing machines: the governance of AI Technology is shaping a new economy powered by big data and advanced analytics. Financial firms have to understand the implications for governance in order to identify and manage the associated risks. James Proudman gives three principles firms can use when they’re thinking about how to do this Sound at last? Assessing a decade of financial regulation Bolton et al argue that despite clear improvements in financial regulation and supervision since the global financial crisis, there is still work to do in several crucial areas and political constraints may bite Open banking: threat or opportunity? Redefining banking in a financial services market where your biggest competitor may be Amazon or Google, not a traditional bank, is a real threat to the incumbents. Tiffany Carpenter considers the options The cost of the Brexit vote The latest OECD data suggests that the cost of Brexit has been £350 million a week since the referendum. Benjamin Born, Gernot Müller, Moritz Schularick and Petr Sedláček examine the future consequences The rise of services and the transmission of monetary policy The shift of production and consumption away from goods and towards services helps explain why inflation in advanced economies is responding more slowly to monetary policy than it did a few decades ago, says Benoît Cœuré Creating stability Peter Praet discusses the importance of institutions as provider of stability and protection in an uncertain world Stablecoins, central bank digital currencies, and cross-border payments Digital currencies are growing rapidly. Tobias Adrian considers the implications and what the future holds for the international monetary system Evolution or revolution: an afterword After the Great Recession Olivier Blanchard and Lawrence Summers believe that a major rethinking of macroeconomic and fiscal policy is in order Cyber resilience as a global public good First principles recognise cyber resilience for what it is, a global public good. Benoît Cœuré considers international cooperation and shares his thoughts on how cooperation can work both from the top down and from the bottom up Euro area growth continues at a more moderate pace Marco Buti et al introduce the European Commission’s Spring 2019 Forecast, consider the growth prospects for Europe and examine the relative impact of cyclical patterns and shocks, external and domestic Financial stability post Brexit: risks from global debt Jon Cunliffe examines current risks to UK financial stability. First he looks at the risks that may arise from Brexit. Then, he considers the wider financial stability environment. And, in particular, global debt levels How to ensure effective sustainable financing of international development The world is committed to the development of low-income countries. Christine Lagarde considers the obstacles that must be overcome Making Basel III work for emerging markets Thorsten Beck and Liliana Rojas-Suarez assess the implications of Basel III for EMDEs and provides recommendations for policymakers to make Basel III work for these economies What reforms are still needed, and why? In January 2018 CEPR published a Policy Insight recommending euro area reforms. Agnès Bénassy-Quéré et al identify priorities that should be at the centre of discussions on euro area architecture The market is betting on climate change Wolfram Schlenker and Charles Taylor look at weather derivatives in financial markets to assess beliefs about climate. They find that traders have been pricing in a warming trend that is closely aligned with the projections of scientific climate models Embracing fintech Fintech could transform the structure of the financial sector. Dave Ramsden sets out three ways the Bank of England is using the latest innovations in finance and technology A platform for innovation Mark Carney highlights the opportunities offered by innovation in the financial services. He says we’re moving to a new kind of economy, which needs new kinds of financial services for individuals and businesses Greening monetary policy The EU is committed to a low-carbon economy. Dirk Schoenmaker believes that the transition could be accelerated by tweaking the Eurosystem's allocation of capital Avoiding the storm: climate change and the financial system Climate change poses significant risks to the economy and to the financial system, Sarah Breeden asserts, and calls for action today Reforming the global reserve system The IMF will turn 75 next year. José Antonio Ocampo believes updating and reforming some aspects of its core functions should be considered The euro area: creating a stronger economic ecosystem Europe has been slow to produce a fully developed financial ecosystem. Christine Lagarde argues that the time is ripe for the euro area to show new resolve and complete the banking and capital markets unions A new horizon The building blocks for a transition to a low-carbon economy are being put in place. Mark Carney believes further progress will be driven by coherent government policies Regulating fintech: ignore, duck type, or code Regulation of fintech is still in its early stages. Marlene Amstad considers the ongoing policy deabte No deal is the best deal for Britain Patrick Minford considers the options for the UK as they reach the endgame in their negotiations with the EU, and finds that a No Deal Brexit is a recipe for economic success Sovereignty in a globalised world Countries need to work together to exercise sovereignty in a globalised world, says Mario Draghi. EU membership helps countries withstand external pressures and achieve policy goals they could not realise alone The European Union and money laundering Money laundering scandals at EU banks have become pervasive. Joshua Kirschenbaum and Nicolas Véron detail the current AML architecture’s fundamental weaknesses and propose a new framework Should the ECB care about the euro’s global role? Are recent shifts in global governance a reason to strengthen the global role of the euro? Benoît Cœuré argues that policies that make the euro more robust make the debate relevant to the ECB Global economy threatened by ‘sustainable’ investments Governments are pressuring portfolio managers to invest their clients’ funds in sustainables. Martin Hutchinson critically examines the arguments made in favour of investing in sustainables Universal basic income and the Finnish experiment Catarina Midoes examines the preliminary results on the Universal Basic Income experiment in Finland, and what they mean for the long-standing questions over the potential impact of UBI in developed countries The euro – a tale of 20 years The financial crisis has laid bare the weaknesses. Marco Buti, Maya Jollès, and Matteo Salto consider the priorities going forward to complete the EMU Risks to banks – from inside and out Banks have become more resilient, but they still face a number of risks and challenges. Sabine Lautenschläger says plenty of work still lies ahead for banks and supervisors Reining in shadow banking Leveraged finance is booming, and the central banks are bystanders. Dirk Schoenmaker argues that there are unused regulatory powers that could yet rein in unsustainable levels of leveraged finance The euro: from monetary independence to monetary sovereignty The euro is the second-most important global currency. Lourdes Acedo Montoya and Marco Buti argue that Europe should boost the international role of the euro Options for Greek bank restructuring After the ESM programme authorities can now consider the legacy of NPLs and private sector debt. Alexander Lehmann looks at the options A European fiscal capacity can improve stabilisation The architecture of the euro area remains incomplete. Jan Stráský and Guillaume Claveres argue that fiscal risk sharing can avoid permanent transfers EU budget implications of a no-deal Brexit A no-deal Brexit would mean the UK’s contributions to the EU budget fall to zero. Zsolt Darvas calculates the estimated budget shortfall and how the burden would fall across different member states Europe and the euro 20 years on We should consider the gains made as a result of having one market with one money, says Mario Draghi, outlining how the Single Market has benefited the people of Europe over the past 20 years The economics of cryptocurrency pump and dump schemes Hamrick et al highlight the need for concerted efforts from industry and regulators to fight cryptocurrency price manipulation
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