The Architecture of Decentralised Finance Platforms in the Post COVID-19 Era – A New Open Finance Paradigm

During the COVID-19 pandemic a new consensus has emerged which castigates modern finance for its tendency towards excessive leverage, and short-termism. As all this activity took place against a background of disappearing disposable incomes, it is not surprising that it also boosted inequality, especially between the asset-rich and the asset-light classes with the latter having […]

The Long Shadow Beyond Lockdown: Board Chairs’ Professional Epidemic Experience and Corporate Investment

The coronavirus pandemic has caused great damage to the global economy, due to the disease itself and the subsequent local and country-wide lockdowns to contain it. While recent investigations have focused on the short-term impact of COVID-19 and the lockdowns, the long-term impact, especially the ways that epidemic experience affects managerial decision making, has received […]

The Impact of COVID-19 on the Municipal Securities Market During the Spring of 2020

The COVID-19 pandemic and associated global economic shutdown roiled financial markets around the world during the spring of 2020. The usually placid municipal securities market was not immune from this disruption. Initially, investors flocked to municipal securities to de-risk portfolios in response to the growing pandemic, pushing prices higher and bond yields to record lows. […]

FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems

The COVID-19 pandemic has changed many aspects of the way that individuals engage with banking and payment tools, including various FinTech services. There are several reasons why the pandemic might have accelerated the adoption of FinTech and other digital platforms in payments by consumers and financial institutions. The pandemic may have led to an increase […]

Financial Stability, Resolution of Systemic Banking Crises and COVID-19: Toward an Appropriate Role for Public Support and Bailouts

COVID-19 is primarily a health and human crisis which has evolved into an ever expanding economic crisis, but not yet a large scale financial crisis. So far, the financial sector has been central to directing financial resources to support economies and societies while governments battle the pandemic. As the length and depth of the economic […]

How should banking supervisors handle COVID-19 crisis?

Supervisory authorities have generally reacted swiftly to the COVID-19 pandemic, deploying support measures such as debt repayment postponement, stimulus packages, and credit guarantees. In some jurisdictions, supervisory authorities also provided capital, liquidity and operational relief to banks. So far, these measures have helped mitigate some of the short-term financial stability risks. However, in many countries, […]

To Impose or Not to Impose—The Dilemma of Negative Interest Rates and the Rise of Bankocracy

As long as other countries are receiving the benefits of Negative Rates, the USA should also accept the “GIFT.” Big numbers! –Donald Trump   On June 10, 2020, the U.S. Federal Reserve (‘the Fed’) voted to keep interest rates near zero in the wake of the COVID-19 pandemic and hinted that rates will remain unchanged […]

The Value of Central Bank Liquidity During a Pandemic

The global spread of COVID-19 has triggered large disruptions in financial markets. In response, central banks, such as the Federal Reserve, have created and continue to run a range of facilities to improve liquidity in financial markets, with the goal of promoting economic recovery. How effective are these facilities during a pandemic? In this blog […]

Macroprodential objectives and challenges

Microprudential regulation aims to prevent the government from being faced with a choice between spending taxpayer money to bailout an insolvent financial institution or suffering a financial and economic collapse. Banking collapses are so costly that it is difficult to resist bailouts when they happen. But the expectation of bailouts generates moral hazard, stoking leverage […]

Financial Contagion during the COVID-19 pandemic

Financial contagion is traditionally defined as a situation in which a shock that initially affects only a few financial institutions spreads, or spills over, to the rest of the financial system and the economy, subsequently infecting the financial systems and economies of other countries. Because of its clear importance to the global economy, this phenomenon […]