Stablecoins: Policy, sovereignty and backstops
No jurisdiction can ignore stablecoins. They can be banned outright only in the most effectively authoritarian countries, or accommodated and even...
Opinion Pieces
The geopolitics of stablecoins
Stablecoins are private digital money pegged to a fiat currency, overwhelmingly the US dollar. Dollar stablecoins reinforce American monetary and...
Stablecoins are run-optimised instruments
Stablecoins are private digital money designed to trade at par with a fiat currency, usually the US dollar. This column argues that stablecoins are...
The paradox of perfect supervision
Each financial crisis brings more financial supervision, more models and larger buffers – but still fragility persists. The paradox of perfect...
How financial authorities best respond to AI challenges
Artificial intelligence is transforming finance faster than the authorities can adapt. This column argues that while AI enhances the financial system...
Of AI bubbles and crashes
Warnings of an AI stock market bubble abound. Should investors and policymakers be concerned? This column argues that innovation-driven bubbles can...
How central banks can meet the financial stability challenges arising from artificial intelligence
The growing use of artificial intelligence (AI) poses difficult challenges for the financial authorities. AI allows private-sector firms to optimise...
Five systemic threats and what to do about them
Systemic financial risk has both internal and external drivers. So, when we focus too strongly on preventing internal crises, such as the 2008 Global...
Artificial intelligence and stability
Financial institutions are rapidly embracing AI – but at what cost to financial stability? This column argues that AI introduces novel stability risks...
The one-in-a-thousand-day problem
Financial crises usually inflict the most damage when banks suddenly shift from pursuing profits to survival. This column argues that such drastic...
Credibility, trust, and perception of authorities’ performance
The credibility of an institution is, almost, synonymous with how well it is trusted. This column uses survey data to examine how trust in various...
How the financial authorities can respond to AI threats to financial stability
Artificial intelligence can act to either stabilise the financial system or to increase the frequency and severity of financial crises. This second...
AI financial crises
The rapid adoption of artificial intelligence is transforming the financial industry. This first of a two-column series argues that AI may either...
Why so many crises happen when we know why they happen and how to prevent them
Financial crises are not complicated, and many claim to know why they happen and how to prevent them. Why then do they happen with such alarming...
The continuing financial fragility of banks
Banks remain fragile, which could be reduced if they held more equity and less debt. Bankers, however, fear this could affect their compensation...
How a regulated utility innovates without breaking things
Safety and stability are essential for public utilities. But they face pressure to innovate to keep up with technological innovation, environmental...
