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Tag Archives: Central bank digital currency

“Money and Banking with Reserves and CBDC,” JF, 2024

Journal of Finance. HTML (local copy). Abstract: We analyze the role of retail central bank digital currency (CBDC) and reserves when banks exert deposit market power and liquidity transformation entails externalities. Optimal monetary architecture minimizes the social costs of liquidity provision and optimal monetary policy follows modified Friedman rules. Interest rates on reserves and CBDC should differ. Calibrations robustly suggest that CBDC provides liquidity more efficiently than...

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Bank of England CBDC Academic Advisory Group

The Bank of England and HM Treasury have formed a CBDC Academic Advisory Group (AAG). The AAG will bring together a diverse, multi-disciplinary group of experts to encourage academic research, debate and promote discussion on a range of topics, to support the Bank and HM Treasury’s work during the design phase of a digital pound. Members: Alexander Edmund Voorhoeve Professor of Philosophy London School of Economics Alistair Milne Professor of Financial Economics Loughborough University...

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Conference on “The Macroeconomic Implications of Central Bank Digital Currencies,” CEPR/ECB, 2023

Conference jointly organized by CEPR’s RPN FinTech & Digital Currencies and the European Central Bank. Welcome speech by Piero Cippolone, keynote by Fabio Panetta. Organizers: Toni Ahnert, Katrin Assenmacher, Massimo Ferrari Minesso, Peter Hoffmann, Arnaud Mehl, Dirk Niepelt. CEPR’s conference website. ECB’s website with videos. Website with pictures.

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“Retail CBDC and the Social Costs of Liquidity Provision,” VoxEU, 2023

VoxEU, September 27, 2023. HTML. From the conclusions: … it is critical to account for indirect in addition to direct social costs and benefits when ranking monetary architectures. … the costs and benefits we consider point to an important role of central bank digital currency in an optimal monetary architecture unless pass-through funding is necessary to stabilise capital investment and very costly. … the interest rate on CBDC should differ from zero and from the rate on reserves. From...

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“Money and Banking with Reserves and CBDC,” CEPR, 2023

CEPR Discussion Paper 18444, September 2023. HTML (local copy). Abstract: We analyze the role of retail central bank digital currency (CBDC) and reserves when banks exert deposit market power and liquidity transformation entails externalities. Optimal monetary architecture minimizes the social costs of liquidity provision and optimal monetary policy follows modified Friedman (1969) rules. Interest rates on reserves and CBDC should differ. Calibrations robustly suggest that CBDC provides...

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“Why the Digital Euro Might be Dead on Arrival,” VoxEU, 2023

With Cyril Monnet. VoxEU, August 10, 2023. HTML. … promoting the digital euro requires an aggressive marketing strategy because private incentives for adoption are limited. However, the pursuit of such an aggressive approach is unlikely as this runs counter to the ECB’s fourth, implicit objective of protecting banks’ existing business model. This is problematic and could turn the project into a significant missed opportunity, for the potential social benefits of the digital euro...

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