Workshop by economist Jörg Bibow
Today’s monetary system is the result of many centuries of evolution: a two-tiered system of “bank money” primarily issued by profit-seeking private banks as part of their lending business, but ultimately anchored by a national central bank equipped with a public mandate that is also issuing a shrinking residual of public (paper) money. The public-private partnership of issuance of bank money observed around the world with manifold national idiosyncrasies, particularly its associated centralized ledger-based payments technology, had not seen any fundamental change over the past 100 years or so.
However, since the global financial crisis of 2007-9 banks and bank money have come under a multi-pronged attack. With banks both weakened by crisis and restrained by re-regulation, new players and new products have entered the market for payments traditionally occupied by banks alone. New technologies and a zero-interest monetary policy backdrop helped stirring up the new-found competition. As a result, after being rather dormant for a century or so, money and payments are changing super rapidly today. Moreover, the direction of travel remains unclear as China, Europe, and the United States appear to be following quite contrasting approaches.
Diverging developments in money and payments between the three global giants may become a critical aspect in the fragmentation of the global financial system that appears to be in the making. A lot of innovation and experimentation in payments is also happening at a rapid speed in the rest of the world. Meanwhile, the G20 is pursuing a coordinated upgrade to cross-border payments, traditionally based on correspondence banking. The high costs of remittances and lack of inclusiveness of banking continue to represent development challenges in many countries.
The workshop sets out to explore the current state of play and the outlook for the evolution (or revolution?) in money and payments and related questions of public policy relevance.
Jörg Bibow invited international experts to Hamburg to reflect on these developments and the above public policy issues.
Participants
- Iñaki Aldasoro, Bank for International Settlements
- Jörg Bibow, Skidmore College
- Peter Bofinger, University of Würzburg
- Sheila Dow, University of Stirling
- Arne Heise, Universität Hamburg
- Lars Hupel, Giesecke+Devrient
- Sheri Markose, University of Essex
- Perry Mehrling, Boston University
- Steffen Murau, Freie Universität Berlin
- Maarten van Oordt, Vrije Universiteit Amsterdam
- Richard Senner, Swiss National Bank
- Andrea Terzi, Milano Catholica University