Author Archives: Guest Blogger

Ethical Considerations of Blockchain: Do We Need a Blockchain Code of Conduct?

By | January 21, 2020

Courtesy of Michele Benedetto Neitz  Blockchain technology is not as decentralized as we think. From the outset, the original innovators of blockchain viewed the technology as an opportunity to solve the “problem” of government oversight over economic activities. A truly decentralized, immutable ledger, would remove the potential for human shortcomings and state control, impacting everything… Read More »

Smart Contracts for Securities Transactions on the DLT Network: Legal Obstacles and Regulatory Challenges

By | January 16, 2020

Courtesy of Joseph Lee Fintech developers and financial institutions[1] have presented the benefits of using smart contracts to facilitate securities/interests transfers (trading) on distributed ledger technology (DLT) platforms. The benefits are DLT’s technological ability to bring about decentralization and disintermediation which are the main characteristics of peer-to-peer (P2P) trading platforms and reduction of transaction costs… Read More »

Surviving the Perfect Storm: Exports, Fiscal Austerity, and Firm Heterogeneity

By | January 7, 2020

Courtesy of Manuel Adelino, Paulo Fagandini, Miguel Ferreira, and Francisco Queiro How do economically depressed areas recover following a recession? Our recent paper uses the 2010–2011 European sovereign debt crisis and a Euro area periphery country as a laboratory to answer this question. The 2010–2011 European sovereign debt crisis led to a severe recession in… Read More »

What do the proposed changes to the supervision of liquidity and funding risks in the UK mean?

By | December 11, 2019

Courtesy of Mete Feridun When it comes to changing UK liquidity regulations, each round of revisions – such as the liquidity coverage ratio, net stable funding ratio, and the cash-flow mismatch risk framework – typically makes funding and liquidity risk management more complex and costly for firms. However, the Prudential Regulation Authority’s (PRA) recent consultation paper… Read More »

Issuing a Central Bank Digital Currency: Possible Motives, Characteristics and Consequences

By | November 21, 2019

Courtesy of Christian Pfister* In 2018, the Bank for International Settlements conducted a survey to which 63 central banks responded. According to the results, 70% of the central banks were then (or planned to be soon) engaged in central bank digital currency (CBDC) work. However, only three central banks reported that they were likely to… Read More »

Access to Safe Assets and Financial Stability

By | November 11, 2019

Courtesy of Marco Macchiavelli In September 2013, the Federal Reserve (Fed) introduced the Overnight Reverse Repurchase (ONRRP) facility to improve its control over short-term interest rates (Frost et al. 2015). To achieve this goal, the Fed offers safe assets in the form of overnight reverse repos to a broad range of market participants, including money… Read More »

About the Rise of Socially Responsible Investors: Monitoring and Valuation Effects

By | November 6, 2019

Courtesy of Othar Kordsachia Background In 2006, the United Nations Principles for Responsible Investing (UN PRI) adopted a sustainability-based decision framework for large institutional investors that moved socially ‘responsible investments’[1] from the margins to the mainstream. Today, assets managed by signatories to the UN PRI are in excess of 80 trillion US dollars. The mission… Read More »

The Impact of Liquidity Regulation on Broker-Dealer Stability

By | October 17, 2019

Courtesy of Marco Macchiavelli and Luke Pettit At the peak of the cycle in 2006, broker-dealers (dealers hereafter) were involved in originating, distributing and financing mortgage-related instruments, which exposed them to significant risks at the turn of the housing cycle in early 2007. To make things worse, they were financing a significant portion of these… Read More »

Does Board Independence Reduce Informed Short Selling Prior to Earnings Announcements? Evidence from Quasi-Natural Experiment

By | October 16, 2019

Courtesy of Suchismita Mishra, Anisur Rahman, and Arun Upadhyay In a new paper, we argue that the transparency created by independent boards prevents informed short sellers from taking advantage of nonpublic information, and thus results in a lower likelihood of surprise predictions of informed short selling prior to upcoming earnings announcements. Short sellers—those who sell… Read More »

Building Fintech Ecosystems: Why Regulatory Sandboxes Tend to Get the Plaudits and Innovation Hubs Do the Work of Promoting Development, Innovation and Competition in Financial Services

By | October 8, 2019

Courtesy of Ross Buckley, Douglas Arner, Robin Veidt, and Dirk Zetzsche Regulatory sandboxes are the flavor of the month. Over 50 countries have now established or announced a “financial regulatory sandbox” since the UK Financial Conduct Authority established the first one in 2016. Sandboxes are safe spaces in which FinTech start-ups and other innovative enterprises… Read More »