Powell says Fed is increasing work on climate change risk

By Central Banking Newsdesk | News | 14 November 2019

“Climate change is an important issue, but not principally for the Fed,” Powell says

Jerome Powell gives testimony

The Federal Reserve has increased its research into managing risks related to climate change, but does not see them as a “near-term” threat, chairman Jerome Powell told US lawmakers on November 14.

Powell told the lawmakers that climate change does not have any near-term implications for monetary policy. The Fed recognises that over time climate change could affect its key policy tool, he said, but it is not something it is considering right now.

He also stressed that climate change was an area where lawmakers, rather than central bankers, would have to take the lead.

“Climate change is an important issue, but not principally for the Fed,” the chairman said while testifying before the joint economic committee. The committee brings together elected officials from both the chambers of the US congress. Powell was responding to a question from Democratic congresswoman Joyce Beatty, who was the only lawmaker to ask about climate change.

”We are not going to be the ones to decide society’s response to [climate change],” Powell said. “That’s going to be elected legislators, not us.”

While the Fed has recently increased its recognition of the impact of climate change on the financial system in public, it is notably later to do so than some of its foreign counterparts. Nonetheless, recent senior Fed official speeches and the central bank’s first climate change research conference at the San Francisco Fed provide a signal the Fed is starting to become more engaged in the issue.

“We are doing a lot of research in this area to think ahead from a risk-management perspective,” Powell said.

Powell said that the Fed is already incorporating climate-related requirements on financial market utilities into its supervision.

“We require financial institutions and financial market utilities, the large utilities that are so fundamental to the financial system, to be resilient against all kinds of things, including severe weather,” he said.

Despite the Fed’s efforts to ramp up its climate change research, it remains a notable absentee from the Network for Greening the Financial System. The group now has 48 central banks and financial regulators as its members, as well as 10 observer institutions. The Fed’s counterparts in the UK, Europe, China and Japan are all NGFS members.

Powell did not say the Fed had any intention to join the NGFS during his testimony. Officials from other central banks working with the NGFS have told Central Banking that they understand the Fed faces strong political pressure not to join the network.

Powell’s testimony follows comments by some other senior Fed officials on the importance of climate change risk. In remarks at the San Fran Fed conference, governor Lael Brainard said while the Fed’s research is still at “an early stage”, it is important it recognises how climate change will impact its policy.

She highlighted the impact climate change might have on long-run neutral rates. Pointing to a 2018 Richmond Fed paper, she said, as the frequency of heat wave increases, output and labour productivity could be negatively impacted.

Kevin Stiroh, the head of supervision at the New York Fed, also recently made a speech on how climate change risks call on supervisors to revisit their tools and data sets to better account of the changing risk profiles of banks. “The US economy has experienced more than $500 billion in direct losses over the last five years due to climate and weather-related events,” Stiroh said in a speech on November 7.

‘Digital identities’ could protect customer data – Carstens

By Central Banking Newsdesk | News | 14 November 2019

BIS chief praises “impressive gains” made by Singapore and India in regulating data

Agustín Carstens

Financial regulators could create “digital identities” for consumers to give them much greater control over their data and allow them to give “informed consent”, Agustín Carstens said today (November 14).

Regulatory authorities needed to do more to face up to the “complex trade-offs” around stability, efficiency and privacy when it comes to financial data, the Bank for International Settlements general manager said.

Creating a “digital identity” for each consumer could ensure data is used transparently and with explicit approval, he argued.

Carstens was speaking in Singapore, a day after the BIS launched a new innovation hub in the city-state. One of the key initial projects for the BIS’s Singapore hub will be to develop a framework for handling digital identities.

The BIS’s innovation hubs are co-ordinating central bank efforts to build global public technology, in the face of potential new systemic players such as Facebook’s libra stablecoin.

Regulators have long had concerns over the handling of data by major tech companies. But there are also positives, Carstens said. Innovative use of data has been a “boon” for underserved borrowers in many parts of the world, he argued.

“In China, the major platforms have facilitated credit for hundreds of millions of new personal and business borrowers,” he told the audience at the Seacen Centre. “In many countries, including here in Southeast Asia, access to transaction data, payment of utility bills, platform reviews, etc is driving greater access to financial services.”

But problems could emerge if regulators maintain a laissez faire approach, Carstens warned. Greater tailoring of financial products to consumers could also allow greater price discrimination, “which will not lead to an increase in consumer welfare”.

Strengthening consumers’ rights to their data could help solve this issue, the BIS chief said. He argued it was important to do this in a way that avoided “fragmenting the data landscape”, as there were important benefits to having greater “scale and scope” to data.

“Data stacks” could be one way of handling customer data, Carstens said, mentioning the Indian Aadhaar scheme and Singapore’s MyInfo. Both give consumers a single place to organise their data, which can then be used to access financial services.

“Digital identity can be an important foundation for digital services, and once these digital infrastructures are in place, payments, government services and a host of other solutions are made possible,” Carstens said. “Making consumers data rich, and giving them greater ability to give informed consent over their data can bring important improvements.”

Regulatory hurdles

The BIS chief outlined several areas requiring action from central banks and regulators. Firstly, many may not be “up to speed” on personal data issues and should “upgrade their understanding”, he said.

A second global policy challenge is the divergence of data laws, with some, such as Europe’s General Data Protection Regulation, giving wide-ranging protections and others taking a more piecemeal approach, Carstens said. In some cases, this could limit progress.

It could also be a challenge for global regulators to collaborate in cases where sensitive data is involved, he said. Some have called for international standards, which would be even more challenging than agreeing domestic standards, he noted.

The BIS has a role to play in co-ordinating this global data work, Carstens argued. He outlined the idea of a “global data stack” along the lines of the Indian and Singaporean platforms.

“In India, but also here in Singapore, digital ID has led to impressive gains in facilitating financial inclusion, particularly by facilitating account opening and better know-your-customer processes,” Carstens said. “Just imagine what we can do if we can extend this experience to the international level, and the world of cross-border payments.”

People: French official becomes ECB’s market operations director

By Central Banking Newsdesk | News | 14 November 2019
Banque de France’s Imene Rahmouni-Rousseau speaks with other guests

European Union: The European Central Bank has appointed Imène Rahmouni-Rousseau, director of markets at the Banque de France, as director-general for market operations.

Rahmouni-Rousseau will take up the post on February 1, 2020. Ulrich Bindseil held the role until she moved to manage market infrastructure and payments at the ECB on November 1.

Rahmouni-Rousseau worked in the private sector as an emerging markets equity analyst at Schroders Investment Management before moving to the Banque de France in 1999. In 2001, she moved to the ECB as an economist in the market operations department.

Three years later, she returned to the Banque de France as head of its financial stability and markets research division. She has headed the French central bank’s market operations department since 2014.

In 2009, she joined the secretariat of the Financial Stability Board in Basel, before returning to the Banque de France in 2014.

Rahmouni-Rousseau has two master’s degrees: one in economics from École Centrale Paris, and another in economics and finance from Sciences Po in Paris.

New Zealand: The Reserve Bank of New Zealand is replacing an assistant governor’s role at its head office with a new post in its office in the country’s largest city.

The RBNZ is ending the role of assistant governor and general manager of people and culture, based at its Wellington office. The position is currently held by Lindsay Jenkin, who is leaving the central bank.

It is creating a role for an assistant governor, who will be in charge of transformation and people, based at its Auckland office. The position aims to support change in the bank’s senior leadership and help build its presence in the city. The RBNZ will begin recruiting later this year.

Governor Adrian Orr said the position helps fulfil part of the RBNZ’s Statement of Intent. “This means growing our Auckland presence, better connecting with our old stakeholders, and building a culture which supports transformation and achievement,” he said.

The RBNZ’s main office is in Wellington, New Zealand’s political capital, but it also has a satellite office in Auckland, the country’s largest city and home to much of its financial sector.

The central bank’s general manager of people and culture will be disbanded on the creation of the new role. Jenkin will leave the RBNZ, where she has worked since 2007, having spent the last year as assistant governor.

“Lindsay has made an incredibly valuable contribution to the Reserve Bank’s success over many years, and remains a significant support of the bank and its vision,” Orr said. “She will leave the bank with my and [the] board’s full support, respect and friendship.”

Washington: World Bank president David Malpass has appointed Hiroshi Matano as executive vice-president of the Multilateral Investment Guarantee Agency (Miga).

Matano will leave his post at BOT Lease, a Mitsubishi UFJ Financial Group affiliate company (MUFG), where he has worked as managing executive officer since 2017.

“I am pleased to have him [Matano] lead Miga, where his background [of] managing assets across global markets will be invaluable for forging partnerships and developing Miga’s business,” said Malpass.

Matano will assume the role in December and replace Keiko Honda, who retired from the World Bank at the end of October. 

Miga promotes cross-border investment in developing countries by providing political risk insurance and credit enhancement to investors and lenders. Currently, 156 developing countries and 25 industrialised countries belong to the group.

The World Bank said that during Honda’s tenure, Miga expanded its overall portfolio, including its work related to climate change and the International Development Association. The IDA provides funding to the world’s poorest economies. Honda also enhanced co-operation with other multilateral development banks, the statement said.

China launches large-sum cash oversight trials

By Central Banking Newsdesk | News | 13 November 2019

PBoC will run pilot tests on cash withdrawal monitoring, in crackdown on illicit activity

The People’s Bank of China (PBoC) launched large-sum cash management trials last week, as the central bank aims to strengthen cash regulation to crack down on tax evasion and money-laundering.

The pilot run will take place in Hebei province, Zhejiang province and Shenzhen. The PBoC will monitor cash withdrawals that exceed certain limits in the three areas.

Hebei was chosen for its “strong foundations for management of large-sum cash operations”, while the eastern Chinese province of Zhejiang is a “key region for cash release in China”, the PBoC said in a statement. Hong Kong’s border city Shenzhen could help the central bank monitor and investigate cross-border cash movements.

The PBoC issued a consultation paper on November 5 and seeks comments until December 5.

The threshold set for corporate accounts in the three regions is 500,000 yuan ($71,264), while the level for individual accounts is 100,000 yuan for Hebei, 300,000 yuan for Zhejiang, and 200,000 yuan for Shenzhen. For cash withdrawals that exceed the limits, transaction records will be reported to the central bank’s monitoring and investigation system.

Strengthening cash regulation

Cash circulation still plays an important role in the Chinese economy, even as mobile payments have become more advanced and universal, the PBoC said.

Cash withdrawals exceeding 100,000 yuan ($14,241) accounted for less than 1% of the total number of transactions, while making up about 27% of total transaction value for certain regions in China, a PBoC report showed.

Cash demand has been on the rise in recent years despite the rapid development of QR-code based mobile payments in China, the PBoC said. The growing use of anonymous transaction methods has led to concerns about the use of large sums of cash for illegal activities, such as corruption, tax evasion and money-laundering.

“China’s large-sum cash management suffers from weak links including limited regulatory coverage and insufficient legal effectiveness,” the PBoC said in the statement. “The system urgently requires strengthening.”

The trials in Hebei, Zhejiang and Shenzhen are scheduled to run for two years. The pilot test will kick off in Hebei province first, with programmes targeting the real estate and medical industries. The trials will begin in Zhejiang province and Shenzhen at an “appropriate time”, the PBoC said.

In Zhejiang province – one of China’s most developed regions – the PBoC will explore regulations targeted for cash usage monitoring in wholesale, real estate and automobile markets. In Shenzhen, the pilot programmes will focus on tracking large-sum cross-border cash movements.

Zhang Zhifu, head of the PBoC’s Nanchang branch in south-eastern China, has proposed to amend China’s laws on cash management, saying the rules were enacted in 1988 and have become outdated.

The PBoC should establish a large-sum cash analytical report system, and monitor cash withdrawals above certain value thresholds, Zhang said. The Chinese customs authority should also strengthen its oversight of cross-border cash movements.

Zhang also introduced a bill focusing on cash management during China’s annual National People’s Congress last year.

Italian banks exploit ECB tiering to sharply boost local deposits

By Victor Mendez-Barreira | News | 13 November 2019

Rush to exploit arbitrage opportunity is “interesting showcase” of fragmented markets, says Benoît Cœuré

Italian banks sharply increased their excess reserve holdings at the Bank of Italy following the introduction of the European Central Bank’s two-tier rates system on October 30, highlighting a possible conundrum for policy-makers.

Between October 30 and November 8, commercial banks increased their liquidity holdings at the national central bank by around €52 billion ($57 billion), according to data published by the ECB on November 12.

On October 30, the ECB’s two-tier system came into force. This exempts part of commercial banks’ excess liquidity holdings at the central bank from the payments required by the ECB’s –0.5% deposit rate. Funds worth up to six times the minimum reserve requirement have a 0% rate applied to them.

The ECB unveiled this measure in September in a bid to reduce the negative side effects long-term negative rates have on the profitability of banks in the eurozone.

“On the first day of operation of the two-tier system we observed a considerable redistribution of excess liquidity, often away from liquidity-flush countries such as Belgium, Germany and the Netherlands and towards countries with unused allowances, such as Italy,” said Benoît Cœuré, ECB executive board member, in a speech on November 12.

The system appears to foster greater cross-border interbank lending. As deposits at the Italian central bank increased, Dutch banks reduced theirs at the Netherlands Bank by €9 billion, and German institutions at the Deutsche Bundesbank by €5 billion over the same period.

This development was reflected in a higher repo rate in Italy. ECB data shows it increased to –0.43% from –0.48% on October 30.

The two-tier system has given some banks in countries such as Italy and Spain negative-rate exemptions that are higher than their excess liquidity holdings. As a result, “Italian banks with unused allowances increased their demand for cash in the Italian repo market, which has led to a notable – albeit temporary – increase in repo rates,” said Cœuré.

In barely over a week, Italian banks have almost filled their quotas of excess liquidity holdings exempt from negative rates. According to ECB data, these have increased from below €50 billion to €90 billion in the period from October 30 to November 8. The total allowance for Italian banks is just below €100 billion.

Arbitrage opportunity

Cross-border interbank lending would have been encouraged by profitable outcomes for both borrowers as well as lenders. Banks exploited arbitrage opportunities, so the increase in repo rates was only temporary, said Cœuré.

Arbitrage allowed Italian banks to borrow from banks elsewhere in the eurozone at negative rates, and deposit these funds at Bank of Italy for free, making a profit. Lending banks were willing to extend funding at negative rates above the –0.5% deposit rate, similarly earning a spread.

Liquidity imbalances

This reaction to the implementation of the two-tier system “provides an interesting showcase for just how fragmented our money markets remain today,” said Cœuré.

For instance, German banks hold 12.5% of total excess liquidity as a share of total Eurosystem assets, and French banks around 9%. But Italian institutions hold only around 2%.

And within some jurisdictions this imbalance is just as stark. “In Italy, for example, the top 10 banks together hold 80% of excess reserves – a concentration level that is, in fact, higher than in the US. In France, the top 10 banks hold 70%,” pointed out the ECB’s executive board member.

This uneven liquidity distribution may contribute to temporary increases in interest rates in parts of the euro area, in spite of high liquidity levels. In this environment, central banks may need to open their deposit facility to other economic actors, added Cœuré.

“This concentration of excess liquidity may ultimately require policy-makers to tolerate central bank balance sheets that are larger than would be required to control short-term interest rates if liquidity was more evenly distributed,” said the ECB official. “If there would be a need for policy-makers to increase their control of short-term rates in an environment of excess liquidity, providing non-banks with access to central bank balance sheets is a powerful option.”

Riksbank sells Canadian and Australian bonds on climate risks

By Central Banking Newsdesk | Speech | 13 November 2019

Swedish central bank based decision on high greenhouse gas emissions in Alberta, Queensland and Western Australia

Sveriges Riksbank recently sold bonds issued by the Canadian state of Alberta, and the Australian states of Queensland and Western Australia, due to their greenhouse gas emissions.

This is part of a new investment policy adopted by the Swedish central bank in 2018, which includes sustainability principles.

“The Riksbank needs to analyse and manage the economic consequences of climate change,” deputy governor Martin Flodén said in a speech today (November 13). “We are now doing this by rejecting issuers who have a large climate footprint.”

Out of its foreign exchange reserves of just over 500 billion krona ($51.3 billion), the Riksbank has invested around 8% in Australian and Canadian federal and regional government bonds in a bid to obtain higher returns and as a risk diversifier.

Nonetheless, “Australia and Canada are countries that are not known for good climate work. Greenhouse gas emissions per capita are among the highest in the world,” said Flodén.

More specifically, greenhouse gas intensity is three times as high in Alberta, a major oil-producing region, than in Ontario and Quebec. Similarly, both Australian provinces have large fossil-fuel industries.

“We have therefore recently sold holdings of bonds issued by the Canadian province of Alberta, and the Australian states of Queensland and Western Australia,” said Flodén.

The deputy governor added that the Riksbank still needs “broader and deeper analysis of the issuers’ climate footprint”.

He also noted the portfolio will remain dominated by US and German government debt. Therefore, “the Riksbank’s contribution to a better development of the climate will therefore remain small”.

Rebel Libyan central bank issues more Russian-printed notes

By Dan Hardie | News | 13 November 2019

Maltese security forces seize large shipment of banknotes meant for rebel territory

The flag of Libya's transitional government

One of the two rival central banks operating in civil war-torn Libya has greatly increased the number of banknotes it is issuing, according to local reports.

Security forces in Malta seized a large shipment of banknotes printed in Russia that were being shipped to the central bank operating in rebel-held territory, the Sunday Times of Malta reported on November 1. The notes were contained in two large shipping containers on a vessel which docked in Malta.

The news agency Reuters said it had obtained Russian customs data showing that the supply of banknotes to the rebel central bank had greatly increased in recent months. “Nearly 4.5 billion Libyan dinars ($3.22 billion) were despatched in four shipments from February to June,” Reuters reported on October 29.

These Russian-printed banknotes are very similar to those issued by the country’s internationally recognised central bank, based in Libya’s capital Tripoli, reports say. Local media outlet The Libya Observer reported on November 10 it had been passed a letter sent by the Tripoli-based government’s presidential council, dated October 13. The letter ordered the Tripoli-based central bank’s governor to crack down on the circulation of Russian-printed notes.

The rebel central bank, based in the eastern city of Bayda, has previously acknowledged receiving Russian-printed banknotes worth 10 billion dinars from 2016 to early 2019, Reuters said. The main rebel commander in the east, general Khalifa Haftar, began a military offensive aimed at capturing Tripoli in April.

Reuters reported that a senior official in the eastern central bank’s liquidity division, Ramzi al-Agha, had said that the bank had contracts with a Russian source for the provision of notes worth between 8 billion and 9 billion dinars. The official did not give a timescale for when these notes would be provided.

Libya’s dinar has fallen sharply in value during the civil war. The increased supply of notes is likely to increase that spiral. 

Rival central banks

Libya has had two central banks since the 2014 outbreak of the “second civil war”, in which rival factions sought to fill the power vacuum left after the overthrow of the country’s long-ruling dictator Muammar al-Gaddafi.

One central bank operates in the country’s capital Tripoli, which is held by the “government of national accord”, or GNA, led by Fayez al-Sarraj. The GNA is recognised by the United Nations and most outside powers as the country’s legitimate government, but its rule is restricted mainly to western Libya. The Tripoli-based central bank issues Libyan dinar banknotes printed by the UK-based company De La Rue.

The eastern central bank is based in the region held by the country’s largest rebel faction, the Libyan National Army, led by Haftar. It began issuing its own currency in 2016. The Russian government is officially neutral in the Libyan civil war, but a number of observers say it is supporting the eastern-based rebels.  

France’s ACPR will not comply with Eiopa Brexit recommendation

By Central Banking Newsdesk | News | 13 November 2019

ACPR is concerned over risks shifting from UK to France

The French prudential regulator, the Autorité de contrôle prudentiel et de résolution (ACPR) has said it will not comply with a recommendation made by the European insurance and pensions regulator in the case of a no-deal Brexit.

The decision could cause frictions for insurance firms with operations that span the border, highlighting one of the many ways in which a disorderly Brexit could impact financial services.                                                                              

In a statement published on November 12, the Bank of England noted the ACPR “does not intend to comply” with the European regulator’s sixth Brexit recommendation, which relates to insurance policies originally sold in the UK by UK insurers to policyholders now resident in France.

“In order to make use of the French Run-Off Ordinance UK insurers must have appropriate passports to carry out business in France in place at UK exit day,” the BoE said.

The ACPR’s stance comes in response to the European Insurance and Occupational Pensions Authority’s recommendations for the insurance sector with respect to Brexit.

Eiopa has recommended that for customers in the European Economic Area who took out certain types of general insurance contracts while resident in the UK and have since moved to the EEA, those contracts should not be regarded as cross-border business. The French regulator disagrees.

According to a statement from the ACPR, dated November 8, firms operating in France before the Brexit date, via the European passport, will be able to pursue contracts “subscribed before Brexit in extinctive management, until termination”.

However, these contracts cannot be renewed or give rise to the issuance of new premiums. This ordinance would also apply to contracts relating to people who currently live in the UK but move to France before the termination of their insurance contract.

These policies will only remain valid “provided that the insurance undertakings are, on the date of a Brexit, authorised to exercise in France by means of the European passport for freedom of establishment or freedom to provide services.”

UK regulators the Financial Conduct Authority and Prudential Regulatory Authority are encouraging firms to seek legal advice following the ACPR’s approach “as soon as possible”.

“This should include consideration of whether you may wish to have any passports to carry out business in France in place prior to exit day to enable the use of the French Run-Off Ordinance,” the BoE said.  

Currently, firms authorised in the UK are also able to carry out business in the EEA thanks to passporting.

Working with European regulators, the BoE has agreed to abide by a temporary permissions regime which will allow EEA-based firms passporting into the UK to continue new and existing regulated business in the UK “for a limited period” while they seek full authorisation.

UK firms looking to continue carrying out business in EEA, however, will have to ensure they abide by local laws and regulations.

Policy-makers should update cyber regulations – Bank of Canada official

By Central Banking Newsdesk | Speech | 13 November 2019

Greater collaboration and information-sharing is required to strengthen reliance, Filipe Dinis says

The Bank of Canada should consider updating cyber regulations to strike the right balance between privacy and competition in the financial sector, a senior bank of Canada official said.

Filipe Dinis, the central bank’s chief operating officer, said its regulatory framework should encourage greater collaboration and sharing of cyber threat information and best defence practices.

“Our regulatory framework can be strengthened by putting in place trusted, secure channels to transmit this kind of sensitive information, to protect the reputation and vulnerabilities of institutions,” he said in a November 12 speech in Toronto. “This will be particularly important for smaller companies that have fewer resources to dedicate to cyber security.”

Dinis added that policy-makers should consider strengthening the minimum requirements around cyber resilience and enforce industry-wide testing.

Furthermore, he said, the financial penalties imposed on banks not complying with regulations could also be tweaked. “If company management is unable to accurately gauge the risk of a systemic cyber event, it may well decide the fine for non-compliance is a cost that is worth paying,” he said.

Dinis called on the private and public sector to collaborate on the design and implementation of cyber tests. “It’s now time to build exercises that involve multiple economic sectors, to provide a more demanding and realistic test of our economic cyber security,” he said.

The central bank’s May financial system survey with risk management personnel revealed that cyber reliance was thought to be the greatest risk to the Canadian financial sector. The next survey is due to be released next month, and Dinis expects cyber security to continue to be the key risk.

BIS Singapore hub to focus on digital identities and regtech

By Central Banking Newsdesk | News | 13 November 2019

Innovation hub launch marks first expansion of BIS’s “global footprint” in 17 years

The Bank for International Settlements’ third innovation hub is to focus on the creation of digital identities and a platform to link central banks and regtech providers.

The hub centre launched today (November 13) on the sidelines of the Singapore fintech festival. It is the last of the three hubs initially announced by the BIS in June. Further locations are set to be unveiled as part of a second phase.

The BIS said today that the Singapore hub, which will be run in partnership with the Monetary Authority of Singapore (MAS), marked the “first expansion of its global footprint in 17 years”. The BIS already had offices at the two previous hub locations, its headquarters in Basel and an Asian office in Hong Kong.

“The BIS innovation hub will foster innovation and greater collaboration among the central banking community globally,” the BIS said. “It will enhance the understanding of financial technology, and aid development of innovative solutions to benefit and enhance the financial system.”

The Singapore hub will “initially” focus on digital identities and regulatory or supervisory technology, regtech and suptech.

The first project will seek to establish a framework for “public digital infrastructures” for sharing identities, consent and data. “Trusted digital identities for individuals and corporates is a foundational public good that supports the development of inclusive digital financial services, including payments as well as other transactions in the broader digital economy,” the BIS said.

The second is to establish a platform that will connect regulators and supervisors with technology firms. Central banks would be able to use the platform to outline regulatory problems and allow fintech firms to pitch solutions to them.

The proposal carries some echoes of the approaches already in use by some central banks, such as the Bank of England’s fintech accelerator and the Bank of Canada’s “Pivot” programme.

Commenting on the launch, MAS managing director Ravi Menon called it a “visionary initiative”. “By working together, central banks can help accelerate the adoption of digital technologies that can help to better serve business and individual customers of financial services, especially in a cross-border setting.”

BIS general manager Agustín Carstens said: “The BIS, together with its partners, is taking a leading role in co-ordinating central banks’ innovation efforts. Central banks are approaching the same challenges, from different directions and with different but complementary skills and experiences. The hub is a central part of this effort.”