Sustainable Architecture for Finance in Europe (SAFE)
Refine
Year of publication
- 2019 (106) (remove)
Document Type
- Working Paper (52)
- Part of Periodical (50)
- Contribution to a Periodical (2)
- Article (1)
- Review (1)
Has Fulltext
- yes (106)
Is part of the Bibliography
- no (106)
Keywords
- Financial Institutions (18)
- ECB (16)
- Capital Markets Union (14)
- Banking Union (9)
- Monetary Policy (8)
- Climate Change (6)
- Cryptocurrency (6)
- Financial Markets (6)
- Sustainable Finance (6)
- TARGET (6)
Institute
- Sustainable Architecture for Finance in Europe (SAFE) (106)
- Wirtschaftswissenschaften (103)
- Center for Financial Studies (CFS) (53)
- House of Finance (HoF) (37)
- Institute for Monetary and Financial Stability (IMFS) (8)
- Institute for Law and Finance (ILF) (7)
- Frankfurt MathFinance Institute (FMFI) (2)
- Präsidium (2)
- Rechtswissenschaft (1)
Wider die schwarze Null
(2019)
Facebook’s proposal to create a global digital currency, Libra, has generated a wide discussion about its potential benefits and drawbacks. This note contributes to this discussion and, first, characterizes similarities and dissimilarities of Libra’s building blocks with existing institutions. Second, the note discusses open questions about Libra which arise from this characterization and, third, potential future developments and their policy implications. A central issue is that Libra raises considerable questions about its role in and impact on the international monetary and financial system that should be addressed before policymakers and regulators give Libra the green light.
We show that banks that are facing relatively high locally non-diversifiable risks in their home region expand more across states than banks that do not face such risks following branching deregulation in the 1990s and 2000s. These banks with high locally non-diversifiable risks also benefit relatively more from deregulation in terms of higher bank stability. Further, these banks expand more into counties where risks are relatively high and positively correlated with risks in their home region, suggesting that they do not only diversify but also build on their expertise in local risks when they expand into new regions.
In this paper we argue that the own findings of the SSM THEMATIC REVIEW ON PROFITABILITY AND BUSINESS MODEL and the academic literature on bank profitability do not provide support for the business model approach of supervisory guidance. We discuss in the paper several reasons why the regulator should stay away from intervening in management practices. We conclude that by taking the role of a coach instead of a referee, the supervisor generates a hazard for financial stability.