By  Angelo Duarte, Jon Frost, Leonardo Gambacorta, Priscilla Koo Wilkens and Hyun Song Shin Key takeaways Public payment infrastructures build on the central bank’s foundational role in the monetary system by promoting competition and interoperability between payment platforms. They can reduce costs for users and promote financial inclusion. Brazil’s recent experience with the Pix retail[…]

Heavily reliant on commodity exports, remittances and tourism, the economies of the Caucasus and Central Asia and their financial systems are vulnerable to volatile external shocks. The Chart of the Week shows how exposed countries in the region are to such disruptions, which in the past have caused economic downturns and financial distress. Although the[…]

By the European Central Bank (ECB) ECB approves Cyprus’ RCB Bank’s sale of part of its loan portfolio to Hellenic Bank ECB restricts RCB’s business: it cannot take new deposits, grant new loans, or make new investments ECB appoints temporary administrator to work with current management and closely monitor bank’s liquidity and capital RCB Bank’s[…]

by Financial Stability Board (FSB) This report examines whether the COVID-19 pandemic changed the ways in which individuals and firms engage with innovative financial service providers and traditional financial incumbents. Its main finding is that the pandemic has accelerated the trend toward digitalisation of retail financial services. Link: FinTech and Market Structure in the COVID-19[…]

Key Takeaways: Banks are increasingly exploring opportunities for using artificial intelligence (AI), including machine learning (ML). Banks’ use of AI/ML presents significant opportunities but can also heighten certain risks and challenges. The Committee intends to continue exploring banks’ use of AI/ML, especially in the areas of explainability, governance, and resilience and financial stability Link: Newsletter[…]

by Jon Danielsson, Charles Goodhart, Robert Macrae The Western countries have sanctioned Russia in a way not applied to any globally integrated major power in over a century, ever since 1914. This column argues that there are lessons to be learned from the 1914 systemic crisis and that high inflation and government debt will make[…]

by Rachel Cho, Rodolphe Desbordes, Markus Eberhardt The current consensus in the literature that the finance-growth nexus is more complex than previously thought has led to concerns about ‘too much finance’. This column looks at the effects of ‘too much finance’ on growth and propensity for banking crisis and finds some evidence of a detrimental[…]

by Financial Stability Board (FSB) Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system. This is the Financial Stability Board’s (FSB’s) updated assessment of risks to financial stability from crypto-assets, published[…]

By Leora Klapper, and Yira Mascaró When COVID-19 hit, governments rushed to provide financial relief to citizens, often using digital channels to do so. At the same time, social distancing forced people to find alternatives to cash and face-to-face shopping. These shifts fueled speculation that the pandemic would create an overall rise in digital financial[…]

 By Thorsten Beck, interviewed by Tim Phillips Since the GFC the UK has used innovative macroprudential and monetary policy tools to maintain stability. But the UK is an international financial centre, and so does this policy framework create spillovers in other places, and do influences from elsewhere affect stability in the UK? Yes and yes,[…]