Tag Archives: Notes

The Economist reports about the “ostensibly free online services” provided by Robinhood, a share-trading app. Instead of taking commissions from customers, Robinhood receives them from the trading venues to which it steers their orders, a controversial but common practice. It also earns returns from the cash clients leave in their accounts, and plans soon to offer margin trading—the buying of stock with borrowed money—for which it will charge a fee. Earlier posts on fintech.

On VoxEU, Elva Bova, Marta Ruiz Arranz, Frederik Toscani and Elif Ture discuss contingent liabilities. Their figure 2 illustrates contingent liability realizations by type and year:

On his blog, Urs Birchler offers different perspectives on the question whether the Swiss National Bank (SNB) is obliged to pay out banks’ reserves in cash. One view: Reserves are legal tender. The SNB therefore is not obliged to exchange reserves against cash. Another view: According to the law, the SNB is required to provide sufficient cash. Moreover, reserves and cash were meant to be perfect substitutes. Yet another view: Lawmakers would have written a different law had they known that...

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in...

In his blog, John Cochrane registers disagreement with Larry Summers and reiterates his own argument that in a liquidity trap, interest rate policy does not have a liquidity effect and thus, only a long-run “expected inflation” or “Fisher” effect: When the liquidity effect is absent, the expected inflation effect is all that remains. Inflation must follow interest rates.