by The Economist refers to our work in the `Free Exchange’ section: But some argue banks would work fine if the public switched their deposits for central-bank digital currencies, so long as the central bank stepped in to replace the lost funding. “The issuance of [such currencies] would simply render the central bank’s implicit lender-of-last-resort guarantee explicit,” wrote Markus Brunnermeier and Dirk Niepelt in 2019. This scenario seems to have partly materialised since the failure of svb, as deposits have fled small banks for money-market funds which can park cash at the Fed, while the Fed makes loans to banks.
Topics:
Dirk Niepelt considers the following as important: Bailout, Bank, Central bank digital currency, Contributions, Notes, Research
This could be interesting, too:
Dirk Niepelt writes “Dunkle Perspektiven: Wenn auch die UBS gerettet werden müsste (Chilling UBS Rescue Scenario),” SRF, 2023
Dirk Niepelt writes “Digital Euro: An Assessment of the First Two Progress Reports,” European Parliament, 2023
Dirk Niepelt writes Bank Solvency vs. Liquidity
Dirk Niepelt writes SNB Strategy Update
The Economist refers to our work in the `Free Exchange’ section:
But some argue banks would work fine if the public switched their deposits for central-bank digital currencies, so long as the central bank stepped in to replace the lost funding. “The issuance of [such currencies] would simply render the central bank’s implicit lender-of-last-resort guarantee explicit,” wrote Markus Brunnermeier and Dirk Niepelt in 2019. This scenario seems to have partly materialised since the failure of svb, as deposits have fled small banks for money-market funds which can park cash at the Fed, while the Fed makes loans to banks.