Tag Archives: Contributions

Conference jointly organized by Bocconi’s Algorand FinTech Lab and CEPR’s RPN FinTech & Digital Currencies. Keynotes by Hyun Song Shin and Xavier Vives. Organized by Claudio Tebaldi and Dirk Niepelt. CEPR’s conference website with program. Bocconi’s website with videos and more.

The “Banking Stability” Expert Group that was formed following the failure of Credit Suisse has published its report (in German). I quote and add my own comments in brackets […]. Summary: Die staatlich unterstützte Übernahme der Credit Suisse durch die UBS im März 2023 hat eine gefährliche Situation schnell stabilisiert. Die Schweiz hat damit einen wichtigen Beitrag zur internationalen Finanzstabilität geleistet. Die Credit Suisse war am 19. März 2023 die erste global systemrelevante Bank...

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...

Neue Zürcher Zeitung, July 5, 2023. PDF. HTML. Ein digitaler Euro könnte den Wettbewerb fördern, mehr Transparenz schaffen und das Too-big-to-fail-Problem entschärfen. Mit ihrer Minimalvariante aber priorisiert die EZB das Ziel der Bewahrung des Status quo im Bankensystem.

SUERF Policy Brief 612, June 2023. HTML, PDF. Executive summary: The ECB’s first two progress reports on the digital euro clarify the project teams’ considerations. Some motivations for a digital euro remain vague, some fundamental tradeoffs receive limited attention. Most importantly, the reports lack an analysis of why digital euro holdings as stores of value are not desirable and whether strategies to limit such holdings cause collateral damage. Against that backdrop some of the design...

Echo der Zeit, SRF, 12 May 2023. HTML with link to audio file. Implications of capital injections and liquidity assistance for the federal government, the SNB, and Switzerland.

European Parliament, April 2023. PDF. Executive summary: The two progress reports provide an insightful overview over some of the thinking underlying the digital euro project. The reports remain vague in some respects, which is not surprising given the early stage of the project and the division of tasks between the ECB and the Commission. The first report suggests that the digital euro can help preserve public money as the anchor of the payment system, but it does not explain how the...

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...

With its annual report from a few weeks ago the SNB communicated minor changes in its monetary policy strategy (p. 24): The review of the monetary policy strategy showed that it has fundamentally proved its worth. There was no need to adjust the first two elements, namely the definition of price stability and the conditional inflation forecast. The strategy has enabled the SNB to fulfil its mandate of price stability well, despite repeated strong external shocks in recent years. The...

Neue Zürcher Zeitung, March 22, 2023. PDF. How to respond? Nationalization now rather than later? Breaking UBS up? Placing government representatives on the supervisory board? Illiquidity crises and the lender of last resort. Vollgeld, higher reserve requirements, and CBDC as partial solutions to TBTF problems.