|
on Payment Systems and Financial Technology |
|
Issue of 2022‒01‒17
twenty-six papers chosen by |
| By: | Ozili, Peterson K |
| Abstract: | Cryptocurrencies have become popular. Economic agents use cryptocurrency such as bitcoins to make payments and it pose a threat to fiat currency. Central banks have begun to respond to this threat. They realize that they need to join the race to offer a digital currency and dominate the digital currency landscape which can lead to the collapse of most private digital currencies that are not issued by a central bank or a monetary authority. In this paper, I show how the issuance of a central bank digital currency can lead to the collapse of private digital currencies such as bitcoin. I argue that central banks will leverage on their monetary powers, and the trust that citizens have in government-backed money. This may give central banks strong incentives to issue a central bank digital currency. The issuance of a central bank digital currency can erode trust in cryptocurrencies, and lead to lack of trust in cryptocurrency, thereby leading to the collapse of cryptocurrencies although not immediately. |
| Keywords: | central bank digital currency, cryptocurrency, bitcoin, blockchain, distributed ledger, payment system, central banks, CBDC, digital innovation, cryptoassets, stablecoin, Covid-19, fiat digital currency |
| JEL: | E42 E52 E58 G21 O31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111218&r= |
| By: | Charles M. Kahn; Maarten van Oordt; Yu Zhu |
| Abstract: | An important feature of physical cash payments is resilience, due to their indifference to power outages or network coverage. Many central banks are exploring issuing digital cash substitutes with similar online payment functionality. Such substitutes could incorporate novel features, making them more desirable than physical cash. This paper considers introducing an expiry date for online digital currency balances to automate personal loss recovery. We show that this functionality could substantially increase consumer demand for digital cash, with the time to expiration playing an important role. Having more information available to the central bank improves accuracy of loss recovery but may decrease welfare. |
| Keywords: | Digital currencies and fintech |
| JEL: | E42 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-67&r= |
| By: | Ozili, Peterson K |
| Abstract: | This paper reviews the recent advances in central bank digital currency research in a way that would help researchers, policy makers and practitioners to take a closer look at central bank digital currency (CBDC). The review shows a general consensus that a central bank digital currency is a liability of the issuing central bank and it has cash-like attributes. The review also presents the motivation and benefits of issuing a central bank digital currency such as the need to improve the conduct of monetary policy, the need to enhance the efficiency of digital payments and the need to increase financial inclusion. The review also shows that many central banks are researching the potential to issue CBDCs due to its many benefits. However, a number of studies have called for caution against over-optimism about the potential benefits of CBDC due to the limiting nature of CBDC design and its inability to meet multiple competing goals. Suggested areas for future research are identified such as the need to find the optimal CBDC design that meets all competing objectives, the need for empirical evidence on the effect of CBDC on the cost of credit and financial stability, the need to undertake country-specific and regional case studies of CBDC design, and the need to find a balance between limiting the CBDC holdings of users and allowing users to hold as much CBDC as they want. The implication of the findings of this review is that central bankers need to pay more attention to the design features of CBDC. Central bankers need to first identify the goals they want to achieve with CBDC, and design the CBDC to have those features. Where possible, there should be opportunities to re-design and re-invent the CBDC to meet changing central bank objectives. |
| Keywords: | Keywords: Digital currency, Money, Central bank digital currency, CBDC, Digital finance, Cryptocurrency, Financial inclusion, CBDC design, Blockchain, Distributed ledger technology. |
| JEL: | E42 E51 E52 E58 E59 G21 G28 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111389&r= |
| By: | Karau, Sören |
| Abstract: | Bitcoin was conceptualized in response to perceived shortcomings in the monetary and financialsystem, not only related to large financial institutions but also to discretionary decision makingin monetary policy. Using high-frequency data and a weekly proxy VAR model, I study theimpact of monetary policy on Bitcoin. The paper shows that monetary shocks have sizableeffects on Bitcoin prices, but that these differ in sign: a disinflationary monetary tightening bythe ECB lowers valuations - consistent with the notion of Bitcoin as a digital gold -, whereasa Fed tightening increases Bitcoin prices. I document similar differences with respect to cen-tral bank information shocks and explore potential explanations by studying various aspects ofthe Bitcoin ecosystem. Exploiting both differences in Bitcoin valuations across currencies andblockchain transaction data, the paper shows that the increased demand for Bitcoin following aUS monetary tightening is primarily driven by emerging markets. I argue that this likely reflectsthe technological and institutional particularities of Bitcoin that make it sought after as globaldigital cashwhen international economic and financial conditions deteriorate. |
| Keywords: | Bitcoin,Blockchain,Monetary policy,Proxy VAR |
| JEL: | E42 G32 L14 O16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:412021&r= |
| By: | Tri VuPhu; Keun Lee; Donghyun Park |
| Abstract: | In this paper, we examine how digitalization affects global value chain. By using empirical evidence at firm level, the paper analyzes the process of the value chain digitalization in the apparel industry. We find that the digitalization of value chains usually originates in downstream stages where platforms emerge and disrupt traditional retailers. Traditional distributional channels such as department stores and mass merchandise stores are replaced by online marketplaces and E-commerce platforms. This type of value chain digitalization, or E-commerce, may be called platform digitalization. In this mode, manufacturers still own design and make production decisions, but the products are digitally distributed through E-commerce platforms, thus bypassing traditional methods of distribution such as department stores and mass merchandise stores. In other words, the value chain is flattened, allowing customers to purchase apparel products at their homes with a few clicks. This transformation of GVC digitalization may have opposite implications for the SMEs and startup manufacturers. On the positive side, the platforms lower customer acquisition cost and results in a higher level of labor productivity. On the negative side, firms have to pay a significant amount of platform provider fees to platform owners. Further, there could be asymmetric impacts on SMEs/startups and old/incumbent firms since the latter face a trade-off between revenue/customer growth and profitability. Alternatively, a full range mode of digitalization is also possible and observed. This mode involves the rise of platform owners who are also brand managers and designers. Here platforms are trying to go beyond the primary role of a two-sided marketplace to penetrate deeper into higher value-added stages of designs and/or brands. The consequent emergence of new hybrid firms has sizable economic consequences. |
| Keywords: | Digitalization; Digital Platform; E-commerce; Platform Provider Fee; Value Chain; Upgrading; Apparel; |
| JEL: | F23 O33 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:snu:ioerwp:no147&r= |
| By: | Jiaqi Li |
| Abstract: | This paper predicts households’ demand for central bank digital currency (CBDC) with different design attributes by applying a structural demand model to a unique Canadian survey dataset. CBDC and its close alternatives, cash and demand deposits, are viewed as product bundles of different attributes. I estimate households’ preferences towards these attributes from how they allocate their liquid assets between cash and demand deposits. The estimated preferences are used to predict the demand for CBDC with a set of design attributes and quantify the impacts of CBDC design choices on CBDC demand. Under a baseline design for CBDC, the aggregate CBDC holdings out of households’ liquid assets could range from 4 to 52%, depending on whether households would perceive CBDC to be closer to cash or deposits. I find that important design attributes include budgeting usefulness, anonymity, bundling of bank services, and rate of return. |
| Keywords: | Central bank research; Digital currencies and fintech |
| JEL: | E58 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-65&r= |
| By: | Alberto Bracci; J\"orn Boehnke; Abeer ElBahrawy; Nicola Perra; Alexander Teytelboym; Andrea Baronchelli |
| Abstract: | Online marketplaces are the main engines of legal and illegal e-commerce, yet the aggregate properties of buyer-seller networks behind them are poorly understood. We analyze two datasets containing 245M transactions (16B USD) that took place on online marketplaces between 2010 and 2021. The data cover 28 dark web marketplaces, i.e., unregulated markets whose main currency is Bitcoin, and 144 product markets of one regulated e-commerce platform. We show how transactions in online marketplaces exhibit strikingly similar patterns of aggregate behavior despite significant differences in language, lifetimes available products, regulation, oversight, and technology. We find remarkable regularities in the distributions of (i) transaction amounts, (ii) number of transactions, (iii) inter-event times, (iv) time between first and last transactions. We then show how buyer behavior is affected by the memory of past interactions, and draw on these observations to propose a model of network formation able to reproduce the main stylized facts of the data. Our findings have implications for understanding market power on online marketplaces as well as inter-marketplace competition. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.09065&r= |
| By: | Lu, Yang; Siegfried, Patrick |
| Abstract: | With the widespread use of the Internet, many industries have developed rapidly. The economy based on the Internet poses a significant threat to the traditional economy. Live streaming plus e-commerce, which is acknowledged as the current global economic status, is the result of combing live streaming and various industries through the Internet. E-commerce live streaming is one of the most essential types of online live streaming. In this article, it is defined as the live streaming of the e-commerce platform used by Key Opinion Leaders or product sellers through the built-in live streaming function of the platform to propagate goods, brands, events, etc. to achieve goals of brand exposure and product sales. Compared with the traditional economic model, the combined model of e-commerce and live streaming has its advantages and characteristics. This kind of marketing tool is now prevalent. However, there are many deficiencies in e-commerce live streaming that need to be improved since the development of e-commerce is immature and supervision of Internet use is ongoing. |
| Keywords: | Consumer behavior; Digital and social media; E-commerce live streaming; New media marketing |
| JEL: | F1 L8 L81 |
| Date: | 2021–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111393&r= |
| By: | Rahman, Abdurrahman Arum |
| Abstract: | Central bank digital currency (CBDC) is a digitized fiat currency. As the nature of the central bank is centralized, the CBDC is also centralized. This paper proposes a decentralized CBDC that is controlled by many central banks together or countries in the world. It is only for international transactions between member countries. While domestic transactions continue to use the national currency of each country. A decentralized CBDC can explore the advantages of digital technologies more deeply than the centralized ones by making reconciliations between central banks in real-time. Furthermore, this system provides international liquidity for all (member) countries in the world sustainably and free of charge. This system eliminates global imbalances, makes the exchange rate more stable, and so makes the whole international monetary system naturally more stable. In doing so, the system does not require economic integration so that all countries in the world may join without many conditions. |
| Keywords: | Cryptocurrency, organic system, global currency, international monetary system, global imbalances. |
| JEL: | E40 E50 O3 |
| Date: | 2022–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111361&r= |
| By: | Vidal-Tomás, David |
| Abstract: | The combination of blockchain technologies and the gaming industry has given rise to metaverses and play-to-earn games, which incorporate their own economy, commerce, and currencies, namely, metaverse and play-to-earn tokens. In this paper, we analysed the performance and dynamics of 174 tokens, the results of which show that this new crypto niche is characterised by a positive performance in the long run and the absence of dependences on the cryptocurrency market, which could attract more gamers, traders, and companies. However, all these groups should be cautious due to the possible onset of a new crypto bubble. |
| Keywords: | Metaverse , Play-to-earn , NFT , Cryptocurrency , Gaming industry , Diversification |
| JEL: | G10 |
| Date: | 2022–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111351&r= |
| By: | Claire Greene; Ellen A. Merry; Joanna Stavins |
| Abstract: | The COVID-19 pandemic has caused large changes in consumer spending, including how people make their payments. We use data from a nationally representative survey of U.S. consumers collected before COVID in 2018 and 2019 and during COVID in 2020 to analyze changes in consumer payment behavior during the pandemic. We find that compared with their payment behavior in 2019, consumers had shifted some of their purchases from in person to online by fall 2020, significantly lowered their use of cash for purchases, and shifted their person-to-person (P2P) payments away from paper (cash and checks). Those changes are consistent with what we might expect, as many people were less able or willing to shop in person. The adoption of electronic P2P increased, especially the use of payment apps such as PayPal, Venmo, and Zelle. Consumers who worked exclusively from home during COVID made significantly higher shares of their payments online or through mobile devices and were less likely to use cash at all compared with those who worked at least partly in person, even after we control for income and education levels. In contrast, payment-behavior changes that took place from 2018 to 2019 were smaller in magnitude and largely insignificant, suggesting that COVID likely accelerated any longer-term trends. Although it is too soon to determine whether these changes will persist for the longer term, we observed them several months after the onset of the pandemic, so they certainly were not just temporary shifts. |
| Keywords: | consumer payments; consumer surveys; payment behavior; COVID-19 |
| JEL: | D12 D14 I12 I18 L81 |
| Date: | 2021–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:93548&r= |
| By: | Saygin Cevik; Dilan Teber |
| Abstract: | This paper investigates the determinants of consumer cash usage in daily transactions in Turkey using a probit model. In doing so, we use the results of the Methods of Payment Survey conducted by the Central Bank of the Republic of Turkey in 2020. The survey results indicate that cash is still the most common form of payment in Turkey, despite recent technological innovations in payment systems. The results show that the likelihood of cash usage increases for the amounts that match currency denominations and convenient prices, while it decreases for the amounts for which the consumer receives a coin change. Also, the likelihood of cash usage decreases with education and income level and increases with age and being a paid employee. As for the transaction characteristics, we find that the likelihood of cash usage decreases with an increase in transaction size and that cash is more frequently used for low-value transactions. It is also worth noting that having greater cash balances at the beginning of the day increases the probability of using cash for all transaction amounts. |
| Keywords: | Cash; Payment behavior; Convenient prices; Probit model |
| JEL: | C25 E42 E58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:2135&r= |
| By: | Carlo Perroni; Kimberley Ann Scharf; Oleksandr Talavera; Linh Vi |
| Abstract: | We explore the link between online salience and charitable donations. Using a unique dataset on phone text donations that includes detailed information on the timing of cash gifts to charities, we link donations to time variation in online searches for words that appear in those charities’ mission statements. The results suggest that an increase in the online salience of the activities pursued by different charities affects the number and volume of donations made to those charities and to charities that pursue different goals. We uncover evidence of positive “own-salience” effects and negative “cross-salience” effects on donations. |
| Keywords: | charitable donations, online search, news shocks |
| JEL: | H41 D12 D64 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9436&r= |
| By: | Matic, Jovanka Lili; Packham, Natalie; Härdle, Wolfgang Karl |
| Abstract: | The cryptocurrency (CC) market is volatile, non-stationary and non-continuous. Together with liquid derivatives markets, this poses a unique opportunity to study risk management, especially the hedging of options, in a turbulent market. We study the hedge behaviour and effectiveness for the class of affine jump diffusion models and infinite activity Lévy processes. First, market data is calibrated to SVI-implied volatility surfaces to price options. To cover a wide range of market dynamics, we generate Monte Carlo price paths using an SVCJ model (stochastic volatility with correlated jumps) assumption and a close-to-actual-market GARCH-filtered kernel density estimation. In these two markets, options are dynamically hedged with Delta, Delta-Gamma, Delta-Vega and Minimum Variance strategies. Including a wide range of market models allows to understand the trade-off in the hedge performance between complete, but overly parsimonious models, and more complex, but incomplete models. The calibration results reveal a strong indication for stochastic volatility, low jump frequency and evidence of infinite activity. Short-dated options are less sensitive to volatility or Gamma hedges. For longer-date options, good tail risk reduction is consistently achieved with multiple-instrument hedges. This is persistently accomplished with complete market models with stochastic volatility. |
| Keywords: | Cryptocurrency options, hedging, bitcoin, digital finance, volatile markets |
| JEL: | G12 |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110985&r= |
| By: | Jaros{\l}aw Kwapie\'n; Marcin W\k{a}torek; Stanis{\l}aw Dro\.zd\.z |
| Abstract: | Time series of price returns for 80 of the most liquid cryptocurrencies listed on Binance are investigated for the presence of detrended cross-correlations. A spectral analysis of the detrended correlation matrix and a topological analysis of the minimal spanning trees calculated based on this matrix are applied for different positions of a moving window. The cryptocurrencies become more strongly cross-correlated among themselves than they used to be before. The average cross-correlations increase with time on a specific time scale in a way that resembles the Epps effect amplification when going from past to present. The minimal spanning trees also change their topology and, for the short time scales, they become more centralized with increasing maximum node degrees, while for the long time scales they become more distributed, but also more correlated at the same time. Apart from the inter-market dependencies, the detrended cross-correlations between the cryptocurrency market and some traditional markets, like the stock markets, commodity markets, and Forex, are also analyzed. The cryptocurrency market shows higher levels of cross-correlations with the other markets during the same turbulent periods, in which it is strongly cross-correlated itself. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.06552&r= |
| By: | Wei Cao (HFUT - Hefei University of Technology); Yun He (HFUT - Hefei University of Technology); Wenjun Wang (HFUT - Hefei University of Technology); Weidong Zhu (HFUT - Hefei University of Technology); Yves Demazeau (LIG - Laboratoire d'Informatique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes) |
| Abstract: | Risk control is a central issue for Chinese peer-to-peer (P2P) lending services. Although credit scoring has drawn much research interest and the superiority of ensemble models over single machine learning models has been proven, the question of which ensemble model is the best discrimination method for Chinese P2P lending services has received little attention. This study aims to conduct credit scoring by focusing on a Chinese P2P lending platform and selecting the optimal subset of features in order to find the best overall ensemble model. We propose a hybrid system to achieve these goals. Three feature selection algorithms are employed and combined to obtain the top 10 features. Six ensemble models with five base classifiers are then used to conduct comparisons after synthetic minority oversampling technique (SMOTE) treatment of the imbalanced data set. A real-world data set of 33 966 loans from the largest lending platform in China (ie, the Renren lending platform) is used to evaluate performance. The results show that the top 10 selected features can greatly improve performance compared with all features, particularly in terms of discriminating "bad" loans from "good" loans. Moreover, comparing the standard |
| Keywords: | credit scoring,ensemble learning,feature selection,synthetic minority oversampling technique (SMOTE) treatment,Chinese peer-to-peer (P2P) lending |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03434348&r= |
| By: | Henri-Louis Vedie |
| Abstract: | En multipliant par deux son cours durant les trois premiers mois de l'année 2021, puis en le divisant pratiquement par deux, en quelques jours du mois d'avril 2021, le Bitcoin interroge, nous interroge. Ce Policy Brief lui est consacré, rappelant son histoire qui commence en 2009, en en faisant un enfant de la crise financière de 2008. Il insiste, aussi, sur le recours à la cryptographie dont s'inspire le Bitcoin, utilisant ses supports à travers la Blockchain et le Minage pour sécuriser la première des monnaies numériques. L'explosion de son cours à la fin de 2020, atteignant un pic record à plus de 62 000 dollars contre un dollar le 13 avril 2021, pour retomber, en moins d'un mois à 36 000 dollars, du fait d'un maître des horloges dans la spéculation, nommé Tesla, le conforte et le condamne. Le conforte dans un nouveau statut, pas nécessairement celui qu'il privilégiait lors de sa création, celui d'être une monnaie virtuelle particulièrement spéculative. Le condamne à n'être jamais ce pourquoi ses auteurs l'ont imaginé et créé, à savoir être une alternative à la monnaie centrale. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb21-16&r= |
| By: | Chiara Belletti (IP Paris - Institut Polytechnique de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech, ECOGE - Economie Gestion - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Daniel Erdsiek (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim [Mannheim]); Ulrich Laitenberger (IP Paris - Institut Polytechnique de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech, ECOGE - Economie Gestion - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Paola Tubaro (TAU - TAckling the Underspecified - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - CentraleSupélec - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - CentraleSupélec - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Crowd work refers to the practice of assigning tasks and projects undertaken for payment to online contributors via digital platforms. We use data from a recent survey among companies in Germany and France to explore the economic relevance and potential barriers of this phenomenon from the demand side. In particular, companies from the information economy and the manufacturing industry have been surveyed in Germany and companies from the manufacturing, construction, and services and trade industries were surveyed in France. Specifically, we provide evidence on the share of companies using crowd work and investigate the reasons behind cross-country similarities and differences. |
| Date: | 2021–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03468022&r= |
| By: | Li, Shiyuan; Li, Yumin |
| Abstract: | Income inequality could lead to weaker economic performance, and there is no consensus on how innovations could affect income inequality. In this paper, we use cross-country panel data to examine the relationship between telecommunications innovation, income inequality, and unemployment. We find different correlations between different levels of technological innovation and income inequality. Our study shows that the spread of 3G communication technologies has little impact on income inequality, while the spread of 4G communication technologies has significantly increased national income inequality. Moreover, the empirical results are robust to various measures of inequality. Finally, 3G communication technologies create far fewer new jobs than jobs displaced by automation, thus increasing unemployment levels. 4G communication technologies create more new jobs, thus reducing unemployment and increasing inequality. |
| Keywords: | Telecommunication Innovation; Inequality; Unemployment |
| JEL: | D63 L96 Q55 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110969&r= |
| By: | Neville Arjani; Fuchun Li; Zhentong Lu |
| Abstract: | In this paper, we develop a discrete choice framework to quantify the economic benefits of payments modernization in Canada. Focusing on Canada’s large-value transfer system (LVTS), we first estimate participants’ preferences for liquidity cost, payment safety and the network effect by exploiting intraday variations in the relative choice probabilities of the two substitutable sub-systems in the LVTS (i.e., Tranches 1 and 2). Then, with the estimated model, we conduct counterfactual simulations to calculate the changes in participants’ welfare when the LVTS is replaced by a real-time gross settlement system (RTGS), like Lynx (as an important part of the payments modernization initiative). The results show that, first, compared to the old system, Lynx has higher liquidity costs but is more secure, while the former is considered a more important factor by system participants. Second, when over 90% of current LVTS payments migrate to Lynx, there is an overall welfare gain; however, it maybe difficult to achieve such a high migration ratio in the new market equilibrium. Third, accounting for equilibrium adjustment, about a 75% service level improvement is needed to generate overall net economic benefits to participants. Among other things, adopting a liquidity savings mechanism and reducing risks in the new system could help achieve this improvement. Finally, the welfare changes are quite heterogeneous, especially between large and small participants. |
| Keywords: | Financial institutions; Financial system regulation and policies; Payment clearing and settlement systems |
| JEL: | C3 E42 G1 G28 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-64&r= |
| By: | Brühl, Volker |
| Abstract: | The importance of agile methods has increased in recent years, not only to manage software development processes but also to establish flexible and adaptive organisational structures, which are essential to deal with disruptive changes and build successful digital business strategies. This paper takes an industry-specific perspective by analysing the dissemination, objectives and relative popularity of agile frameworks in the German banking sector. The data provides insights into expectations and experiences associated with agile methods and indicates possible implementation hurdles and success factors. Our research provides the first comprehensive analysis of agile methods in the German banking sector. The comparison with a selected number of fintechs has revealed some differences between banks and fintechs. We found that almost all banks and fintechs apply agile methods in IT-related projects. However, fintechs have relatively more experience with agile methods than banks and use them more intensively. Scrum is the most relevant framework used in practice. Scaled agile frameworks are so far negligible in the German banking sector. Acceleration of projects is apparently the most important objective of deploying agile methods. In addition, agile methods can contribute to cost savings and lead to improved quality and innovation performance, though for banks it is evidently more challenging to reach their respective targets than for fintechs. Overall our findings suggest that German banks are still in a maturing process of becoming more agile and that there is room for an accelerated adoption of agile methods in general and scaled agile frameworks in particular. |
| Keywords: | Agile Methods,Scrum,Banking,FinTechs |
| JEL: | G20 G21 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:669&r= |
| By: | Christian Aubin (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers) |
| Abstract: | This paper reconsiders the Fisherian equation of exchange by explicitly distinguishing two types of transactions associated with industrial circulation, on the one hand, and financial circulation, on the other. In this context, a formal link can be established between the financialization of the economy and the downward trend in the income velocity of money during the last decades. |
| Abstract: | Ce papier reconsidère l'équation fisherienne des échanges en distinguant explicitement deux types de transactions associées, d'une part, à une circulation industrielle et, d'autre part, à une circulation financière. Dans ce cadre, un lien peut être établi entre la financiarisation de l'économie et la baisse tendancielle de la vitesse-revenu de circulation de la monnaie des dernières décennies. |
| Keywords: | money,quantity theory of money,equation of exchange,velocity of money,financialization,monetary policy |
| Date: | 2021–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03494603&r= |
| By: | Lucas Misera; Ann Marie Wiersch |
| Abstract: | the fourth concludes that businesses owned by women, and, in particular, by Black women, faced more financial and operational challenges during the pandemic and were less likely to receive financing than men-owned businesses. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:g00003:93536&r= |
| By: | Hu, Junjie; Härdle, Wolfgang |
| Abstract: | We uncover networks from news articles to study cross-sectional stock returns. By analyzing a huge dataset of more than 1 million news articles collected from the internet, we construct time-varying directed networks of the S&P500 stocks. The well-defined directed news networks are formed based on a modest assumption about firm-specific news structure, and we propose an algorithm to tackle type-I errors in identifying the stock tickers. We find strong evidence for the comovement effect between the news-linked stocks returns and reversal effect from the lead stock return on the 1-day ahead follower stock return, after controlling for many known effects. Furthermore, a series of portfolio tests reveal that the news network attention proxy, network degree, provides a robust and significant cross-sectional predictability of the monthly stock returns. Among different types of news linkages, the linkages of within-sector stocks, large size lead firms, and lead firms with lower stock liquidity are crucial for cross-sectional predictability. |
| Keywords: | Networks,Textual News,Cross-Sectional Returns,Comovement,Network Degree |
| JEL: | G11 G41 C21 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:irtgdp:2021023&r= |
| By: | Michael J. Lamla (Leuphana University Lüneburg and ETH Zürich, KOF Swiss Economic Institute); Dmitri V. Vinogradov (University of Glasgow and National Research University Higher School of Economics) |
| Abstract: | Policy announcements by central banks affect financial markets, but their effect on consumer beliefs is limited. This paper studies the implications of using different communication channels: established media outlets versus social media. Information on the news sources comes from our original consumer surveys administered just before and right after policy announcement events, enabling a causal inference on the announce- ment effect. We focus on the Bank of England, the first central bank to actively adopt accessible language, simplified messages and new forms of communication via its Twitter account. Based on about 10 000 individual consumer responses in 2018-2019, overall we find no statistically significant effect of announcements on perceptions or expectations, yet respondents who receive news have better perceptions and expectations than those who don't. Policy announcement events trigger an increase in the share of consumers who receive monetary policy news, the share of informed consumers is higher among Twitter users, suggesting potential benefits from Twitter communication with the public. However, Twitter users tend to overestimate inflation and interest rates, make a greater expectations/perception error. In addition they report higher confidence in their estimates. In terms of expectations quality, spreading the word of the Central bank via conventional mass media appears to be more effective than tweets. |
| Keywords: | perceptions, expectations, central bank communication, consumer, Twitter |
| JEL: | E52 E58 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:403&r= |
| By: | Neil Bhutta; Jacqueline Blair; Lisa J. Dettling |
| Abstract: | Most financial advisors recommend storing three to six months of expenses in liquid assets in case of an emergency. Yet we estimate that more than half of U.S. families do not have at least three months of their non-discretionary expenses in liquid savings. We find that financial literacy is strongly predictive of having three months of liquid savings, controlling for income, income variability, and even parental resources. We also find that financial literacy predicts liquid savings across the income distribution. These results indicate that accumulation of an emergency fund is not simply a function of income. Finally, financial literacy is predictive of liquid savings even among high illiquid wealth households. This suggests that the phenomenon of "wealthy hand-to-mouth" families may reflect financial mistakes rather than portfolio optimization. Our paper highlights the importance of financial knowledge in explaining families' preparedness to deal with unexpected expenses or disruption in their income. |
| Keywords: | Financial Literacy; Savings; Liquidity; Household Wealth; Household Finance |
| JEL: | D14 D91 G50 G51 G53 |
| Date: | 2021–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2021-76&r= |