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Tag Archives: Financial Markets/ Finance

History of Money (Part III) | From Bitcoin to central bank digital currency

The third and final part of the series on history of money has been released. The three part series is as follows: History of Money (Part I) | From cowries to cryptocurrency  History of Money (Part II) | Currencies, banking and crises History of Money (Part III) | From Bitcoin to central bank digital currency Happy reading. This entry was posted on March 5, 2021 at 2:36 pm and is filed under Academic research & research papers,...

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How Bahamas, Sri Lanka, and Uganda fight the pandemic’s disruption with technological innovation

Steven Dorst in this IMF article reflects on lessons from three countries: Never let a serious crisis go to waste.” Innovators around the world are taking the saying seriously, responding to the disruption caused by the COVID-19 pandemic with creative digital solutions. The initiatives we highlight here are markedly diverse: the overnight transformation of Sri Lanka’s 125-year-old live tea auction; the world’s first central bank digital currency in The Bahamas; and the rapid pivot from a...

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Investor size, liquidity and prime money market fund stress

Fernando Avalos and Dora Xia in this BIS research: Massive redemptions at money market funds (MMFs) investing primarily in high-quality short-term private debt securities were an important feature of the market dislocations in March 2020. Building on previous studies of the underlying drivers, we find that large investors’ withdrawals did not differentiate across prime institutional MMFs according to these funds’ asset liquidity positions. We also find that, faced with large redemptions,...

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What Are the New Inflation Hawks Thinking?

Prof Brad Delong writes for Proj Syndicate: After so many years of hand-wringing over disappointing US economic growth, it is odd to hear prominent economists sounding the alarm about the mere possibility of inflation. If anything, we should want an economy in which a higher federal funds rate is warranted. This entry was posted on March 5, 2021 at 11:07 am and is filed under Academic research & research papers, Central Banks /...

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An IMF economist explains central bank digital currency to his mother

Tommaso Mancini-Griffoli in this IMF article: My dear mother, I hope this letter finds you well, back in Italy. We are fortunate to have just visited; now we’ll go back to seeing each other on screen for a few months. Still, how far we’ve come since the immigrants of the last century who could only write letters—and hope they would eventually arrive. And yet, as I unpacked, I found remnants of our visit: euro notes, unused from my trip and now souvenirs of my stay. If only I could send...

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Greening (runnable) brown assets with a liquidity backstop

Eric Jondeau, Benoit Mojon and Cyril Monnet in this new BIS paper: In anticipation of a risk of runs on brown assets and a resulting pooling equilibrium, low- and high-emissions firms are not easily differentiated by external investors. As a result, all firms face the same initial funding costs ahead of production, and some high-emissions firms will be unable to subsequently refinance their activity because investors will not take the risk of financing them. The findings also show that a...

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The tale of the three stabilities: price stability, financial stability and economic stability

Governor François Villeroy de Galhau of Banque De France in this speech: The past twelve months have seen some of the most dramatic events since World War II, with this unprecedented pandemic. For this reason, and given that today is about the Financial Stability Review, I will focus on the concept of stability itself. Other sources of instability have affected the world economy in the past decade or so: the Global Financial Crisis and ensuing recession, the European Debt Crisis, or...

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Limiting Central Banking

From Moneyandbanking blog Since 2007, and especially over the past year, actions of public officials have blurred the lines between monetary and fiscal policy almost beyond recognition. Central banks have expanded both the scope and scale of their interventions in unprecedented fashion. This fiscalization risks central bank independence, thereby weakening policymakers’ ability to deliver on their mandates for price and financial stability. In our view, to find a way to back to the...

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India’s Approach to Open Banking: Some Implications for Financial Inclusion

Yan Carriere-Swallow, Vikram Haksar and Manasa Patnam in this IMF paper: We examine how the development of the digital infrastructure known as the “India Stack”—including an interoperable payments system, a universal digital ID, and other features—is delivering on the government’s objective to expand the provision of financial services. While each individual component of the India Stack is important, we argue that its key overarching feature is a foundational approach of providing...

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History of Money: From cowries to cryptocurrencies (Three Part Series)

Here is my attempt to write history of money in three part series on Moneycontrol. The first two parts are out: History of Money (Part I) | From cowries to cryptocurrency History of Money (Part II) | Currencies, banking and crises Part – III to be released on 4th Mar 2021. This entry was posted on March 1, 2021 at 4:22 pm and is filed under Academic research & research papers, Central Banks / Monetary Policy, Economics - macro,...

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