Background: Additional Tier 1 (AT1) Capital Instruments under Basel III During the global financial crisis (2007-2009), several banks had to be rescued through capital injections by their governments which led to supporting not only the depositors but also the investors in Additional Tier 1 (AT1) and Tier 2 regulatory capital instruments. Inadequate loss-absorption by regulatory […]
Financial Stability, Payment Systems, Supervision
Fast Payments and Combating the Evolving Threat of Frauds and Scams in Asia
30
Oct
Oct
The purpose of this blog is to share how fast payments in Asia can be used fraudulently and to illustrate some of counter measures that are being implemented to combat frauds and scams. Across Asia and all around the world, scams and cybercrimes have been on the rise, particularly since the global COVID-19 pandemic. This […]
21
Jun
Jun
The swift downfall of Silicon Valley Bank (SVB) amidst the recent banking crisis in the United States has sparked renewed curiosity regarding the potential impact of central bank digital currencies (CBDCs) on financial stability. The collapse of Silicon Valley Bank has started a stampede in the outflow of deposits from banks. Bank deposits have fallen […]
03
Mar
Mar
Due to the expanding utilisation of technology, the digital economy’s growth, and the enlarging fragmentation in the payment chain, safeguarding personal information has become a significant concern for both individuals, organisations and governments. Not only is it crucial to safeguard the privacy rights of individuals, but it also has significant implications for businesses, as data […]
Financial Stability
Revolutionising Payment Services: The Impact of the Payment Services Directive (PSD) in the European Union and beyond
03
Feb
Feb
The rise of internet and mobile payments has drastically altered the way people pay for goods and services. This change is not only reflected in an increase in their share of overall payments, but also in the way our habits and preferences have evolved. Banks, payment card companies and intermediaries have responded to these changes […]
Macroeconomics and Monetary Policy
Dollar Strength and its Implications for Emerging Market Capital Flows – A Macro-Financial Perspective
31
May
May
Predominance of the US dollar (USD) funding market, notably post Great Financial Crisis (GFC), has reinforced the macro financial linkages between global financial conditions and capital flows to emerging markets (EM). A stronger dollar is linked to tighter global financial conditions and higher tail risk for EM capital flow withdrawal – the financial risk […]
30
May
May
Stablecoins are a type of digital asset that purports to maintain a stable value by referencing physical, financial or virtual assets (FSB (2020)). They can be further differentiated into currency-based, financial instrument-based, commodity-based and crypto asset-based stablecoins. There are also algorithmic stablecoins that aim to maintain a stable value via protocols that provide for the […]
10
May
May
Despite the relatively widespread adoption of mobile and internet technology in the Caribbean, retail payments[i] are characterised by “high costs and insufficient access for large swathes of the region’s population (BIS (2020)).” The lack of access to a regular bank account or to other services of financial institutions through mobile devices adversely impacts people from […]
16
Feb
Feb
Despite the fact that central bank digital currencies (CBDCs) are frequently called ‘a solution in search of a problem’, some 86 per cent of central banks worldwide are actively researching the potential for a CBDC. Their design, implementation and adoption will be strongly influenced by country specific objectives and there is no ‘one-size-fits-all’ solution. One prominent objective for a CBDC is financial inclusion, i.e., facilitating access to financial services for the world’s 1.7 billion under- or unbanked. The implicit assumption is that a CBDC and its associated technology provides better access to financial services than current systems. But this is putting the CBDC cart before the horse: a CBDC can at best be part of the solution, but it is unlikely to be the only solution. For a CBDC to increase financial inclusion, it must address the causes of exclusion, and any CBDC initiative would need to be embedded in a much wider set of reforms undertaken by the government in co-operation with the private sector. A CBDC will enhance inclusion only if this dimension features prominently in its design from the outset. There are more straightforward and targeted ways to support access to financial services than to launch a CBDC.
Financial Stability, Supervision
To Bail-In or not To Bail-In: A Question for Asian Financial Policymakers
16
Aug
Aug
The Great Financial Crisis (GFC), which began in 2007 and whose effects persisted for a decade, spurred a cavalcade of major worldwide regulatory, supervisory, and resolution reforms for the banking sector and the broader financial sector. In particular, the massive costs incurred by resolution and deposit insurance authorities (and ultimately, taxpayers) to clean up failed […]