Morten Bech - Academia.edu (original) (raw)
Papers by Morten Bech
comments. All views expressed in this Policy Brief, and any errors, are those of the authors and ... more comments. All views expressed in this Policy Brief, and any errors, are those of the authors and do not represent the views of the Peterson Institute for International Economics or the D. E. Shaw Group. © Peterson Institute for International Economics. All rights reserved. The dramatic increase in the Federal Reserve’s balance sheet since 2009 has attracted the attention of economists, pundits, and ordinary citizens. The amount of assets held by the Fed recently crossed 4trillionandwilllikelycontinuetorisetoapeakofabout4 trillion and will likely continue to rise to a peak of about 4trillionandwilllikelycontinuetorisetoapeakofabout4.5 trillion. This run-up in asset holdings has resulted from the Fed’s large-scale asset purchase programs, which were intended to support economic growth. However, a side-effect of these asset purchases is the creation of unprecedented amounts of liquidity in the financial system. This liquidity will present a challenge when the time comes to raise short-term interest rates. Indeed, the Federal
In a modern financial system the importance of a given institution depends on both its individual... more In a modern financial system the importance of a given institution depends on both its individual characteristics as well as the nature of its relationships with other financial institutions. In this paper we examine the network defined by the credit controls in the Canadian Large Value Transfer System (LVTS). We provide a ranking with respect to the predicted liquidity holdings. We define these liquidity holdings as functions of the network structure defined by the credit controls in LVTS. An institution is deemed most important if, based on our network analysis, it is predicted to hold the most liquidity. In addition we provide a unique measure of how fast an institution is in terms of processing its payments. JEL classification: C11, E50, G20,
Chapters in SUERF Studies, 2019
The conference will be staged as a court trial in which cash will be accused with three charges: ... more The conference will be staged as a court trial in which cash will be accused with three charges: First, cash is an essential part of many kinds of criminal activities; second, it is an inefficient and outdated means of payment; and third, it prevents central banks from implementing optimal monetary policy in times when price stability would require negative interest rates. To spur a lively discussion we intend to develop the conference in a defense and prosecution part, where witness’ are called to elaborate on the charges. Additional presentations will provide a neutral overview of the current situation of the use of cash in the Eurosystem and of ideas to develop a digital cash by central banks.
Bis Quarterly Review, Dec 1, 2013
We show how the financial system can become illiquid following wide-scale disruptions. Two forces... more We show how the financial system can become illiquid following wide-scale disruptions. Two forces are at play 1) operational problems and 2) changes in behavior by participants. We model the interbank payment system as an n-player game and utilize the concept of a potential function to describe the process by which one of multiple equilibria emerges after a wide-scale disruption. If the disruption is large enough, hits a key geographic area or hits a ”Too Big to Fail ” participant then coordination potentially breaks down and central bank intervention might be required to re-establish the socially efficient equilibrium. We also explore how the network topology of the underlying payment flow among banks affects the resiliency of coordination. The paper provides a theoretical framework to analyze the effects of events such as September 11, 2001.
SSRN Electronic Journal, 2012
Routledge International Studies in Money and Banking, 2007
BIS Quarterly Review Special Features Series, 2020
Innovative technologies, such as distributed ledgers, allow securities to be issued or represente... more Innovative technologies, such as distributed ledgers, allow securities to be issued or represented in a new form known as digital tokens. Such "tokenisation" of securities will alter post-trade clearing and settlement, and could improve efficiency in some dimensions. But the fundamental trade-offs involving credit risk and liquidity remain in a tokenised world. To succeed, tokens will need to interoperate with account-based systems, at least in the interim.
Capital Markets: Market Microstructure eJournal, 2017
This feature looks at technology in payment systems. It compares the diffusion of real-time gross... more This feature looks at technology in payment systems. It compares the diffusion of real-time gross settlement (RTGS) systems for wholesale payments with that of faster systems for retail payments (fast payments). RTGS systems emerged in the 1980s and were adopted globally within a span of 30 years. Fast payments followed in the early 2000s, offering instant payments on a 24-hour, seven-day basis. So far, the diffusion of fast payments mirrors that of RTGS, and it is primed to take off. Yet even while adoption of fast payments is under way, the next generation of payment systems, such as those based on distributed ledger technology, is under development.
Comparative Political Economy: Monetary Policy eJournal, 2016
Since mid-2014, four central banks in Europe have moved their policy rates into negative territor... more Since mid-2014, four central banks in Europe have moved their policy rates into negative territory. These unconventional moves were by and large implemented within existing operational frameworks. Yet the modalities of implementation have important implications for the costs of holding central bank reserves. The experience so far suggests that modestly negative policy rates transmit through to money markets and other interest rates for the most part in the same way that positive rates do. A key exception is retail deposit rates, which have remained insulated so far, and some mortgage rates, which have perversely increased. Looking ahead, there is great uncertainty about the behaviour of individuals and institutions if rates were to decline further into negative territory or remain negative for a prolonged period.
Fast täglich tauchen neue Kryptowährungen auf, und es wird immer wieder diskutiert, ob die Zentra... more Fast täglich tauchen neue Kryptowährungen auf, und es wird immer wieder diskutiert, ob die Zentralbanken nicht eigene Versionen ausgeben sollten. Doch wie könnten Kryptowährungen von Zentralbanken aussehen, und welchen Nutzen hätten sie? In diesem Feature-Artikel wird eine Klassifizierung von Geld vorgestellt, die zwischen zwei Arten von Kryptowährungen – für Privatund für Großkunden – unterscheidet und sie gegenüber anderen Formen von Zentralbankgeld wie Bargeld und Reserven abgrenzt. Zudem werden die verschiedenen Merkmale von Kryptowährungen von Zentralbanken erörtert und Vergleiche mit bestehenden Zahlungsmitteln gezogen.
BIS Quarterly Review Special Features Series, 2020
Technological innovation is transforming payments. Domestic payments are increasingly convenient,... more Technological innovation is transforming payments. Domestic payments are increasingly convenient, instantaneous and available 24/7. However, shortcomings in access to payments and cross-border payments remain. Lack of access to payments is a problem in some emerging market and developing economies. Improving cross-border payments will require international coordination. Initiatives to improve cross-border payments would benefit from better data to quantify both the extent and the drivers of the problems.
Quasi quotidianamente sorgono nuove criptovalute e molte parti interessate cominciano a chiedersi... more Quasi quotidianamente sorgono nuove criptovalute e molte parti interessate cominciano a chiedersi se le banche centrali non dovrebbero emetterne di proprie. Ma come dovrebbero essere le criptovalute delle banche centrali (CBCC)? E sarebbero utili? Questo articolo fornisce una tassonomia della moneta, individuando due tipi di CBCC – al dettaglio e all’ingrosso – e distinguendole da altre forme di liquidità delle banche centrali, come i contanti e le riserve. Illustra inoltre le diverse caratteristiche delle CBCC e delinea un confronto tra di esse e le opzioni di pagamento già esistenti.
De nouvelles crypto-monnaies apparaissent chaque jour ou presque, et nombreux sont ceux qui se de... more De nouvelles crypto-monnaies apparaissent chaque jour ou presque, et nombreux sont ceux qui se demandent si les banques centrales devraient émettre ce type de monnaies. Mais à quoi pourraient-elles ressembler, et seraient-elles utiles ? Dans cet article, les auteurs proposent une taxonomie différenciant deux types de crypto-monnaies (de gros et de détail) susceptibles d’être émises par les banques centrales, tout en les distinguant des autres formes de monnaies (liquidités, réserves) des banques centrales. Ils présentent les différentes caractéristiques des crypto-monnaies de banques centrales et les comparent aux options de paiement existantes.
comments. All views expressed in this Policy Brief, and any errors, are those of the authors and ... more comments. All views expressed in this Policy Brief, and any errors, are those of the authors and do not represent the views of the Peterson Institute for International Economics or the D. E. Shaw Group. © Peterson Institute for International Economics. All rights reserved. The dramatic increase in the Federal Reserve’s balance sheet since 2009 has attracted the attention of economists, pundits, and ordinary citizens. The amount of assets held by the Fed recently crossed 4trillionandwilllikelycontinuetorisetoapeakofabout4 trillion and will likely continue to rise to a peak of about 4trillionandwilllikelycontinuetorisetoapeakofabout4.5 trillion. This run-up in asset holdings has resulted from the Fed’s large-scale asset purchase programs, which were intended to support economic growth. However, a side-effect of these asset purchases is the creation of unprecedented amounts of liquidity in the financial system. This liquidity will present a challenge when the time comes to raise short-term interest rates. Indeed, the Federal
In a modern financial system the importance of a given institution depends on both its individual... more In a modern financial system the importance of a given institution depends on both its individual characteristics as well as the nature of its relationships with other financial institutions. In this paper we examine the network defined by the credit controls in the Canadian Large Value Transfer System (LVTS). We provide a ranking with respect to the predicted liquidity holdings. We define these liquidity holdings as functions of the network structure defined by the credit controls in LVTS. An institution is deemed most important if, based on our network analysis, it is predicted to hold the most liquidity. In addition we provide a unique measure of how fast an institution is in terms of processing its payments. JEL classification: C11, E50, G20,
Chapters in SUERF Studies, 2019
The conference will be staged as a court trial in which cash will be accused with three charges: ... more The conference will be staged as a court trial in which cash will be accused with three charges: First, cash is an essential part of many kinds of criminal activities; second, it is an inefficient and outdated means of payment; and third, it prevents central banks from implementing optimal monetary policy in times when price stability would require negative interest rates. To spur a lively discussion we intend to develop the conference in a defense and prosecution part, where witness’ are called to elaborate on the charges. Additional presentations will provide a neutral overview of the current situation of the use of cash in the Eurosystem and of ideas to develop a digital cash by central banks.
Bis Quarterly Review, Dec 1, 2013
We show how the financial system can become illiquid following wide-scale disruptions. Two forces... more We show how the financial system can become illiquid following wide-scale disruptions. Two forces are at play 1) operational problems and 2) changes in behavior by participants. We model the interbank payment system as an n-player game and utilize the concept of a potential function to describe the process by which one of multiple equilibria emerges after a wide-scale disruption. If the disruption is large enough, hits a key geographic area or hits a ”Too Big to Fail ” participant then coordination potentially breaks down and central bank intervention might be required to re-establish the socially efficient equilibrium. We also explore how the network topology of the underlying payment flow among banks affects the resiliency of coordination. The paper provides a theoretical framework to analyze the effects of events such as September 11, 2001.
SSRN Electronic Journal, 2012
Routledge International Studies in Money and Banking, 2007
BIS Quarterly Review Special Features Series, 2020
Innovative technologies, such as distributed ledgers, allow securities to be issued or represente... more Innovative technologies, such as distributed ledgers, allow securities to be issued or represented in a new form known as digital tokens. Such "tokenisation" of securities will alter post-trade clearing and settlement, and could improve efficiency in some dimensions. But the fundamental trade-offs involving credit risk and liquidity remain in a tokenised world. To succeed, tokens will need to interoperate with account-based systems, at least in the interim.
Capital Markets: Market Microstructure eJournal, 2017
This feature looks at technology in payment systems. It compares the diffusion of real-time gross... more This feature looks at technology in payment systems. It compares the diffusion of real-time gross settlement (RTGS) systems for wholesale payments with that of faster systems for retail payments (fast payments). RTGS systems emerged in the 1980s and were adopted globally within a span of 30 years. Fast payments followed in the early 2000s, offering instant payments on a 24-hour, seven-day basis. So far, the diffusion of fast payments mirrors that of RTGS, and it is primed to take off. Yet even while adoption of fast payments is under way, the next generation of payment systems, such as those based on distributed ledger technology, is under development.
Comparative Political Economy: Monetary Policy eJournal, 2016
Since mid-2014, four central banks in Europe have moved their policy rates into negative territor... more Since mid-2014, four central banks in Europe have moved their policy rates into negative territory. These unconventional moves were by and large implemented within existing operational frameworks. Yet the modalities of implementation have important implications for the costs of holding central bank reserves. The experience so far suggests that modestly negative policy rates transmit through to money markets and other interest rates for the most part in the same way that positive rates do. A key exception is retail deposit rates, which have remained insulated so far, and some mortgage rates, which have perversely increased. Looking ahead, there is great uncertainty about the behaviour of individuals and institutions if rates were to decline further into negative territory or remain negative for a prolonged period.
Fast täglich tauchen neue Kryptowährungen auf, und es wird immer wieder diskutiert, ob die Zentra... more Fast täglich tauchen neue Kryptowährungen auf, und es wird immer wieder diskutiert, ob die Zentralbanken nicht eigene Versionen ausgeben sollten. Doch wie könnten Kryptowährungen von Zentralbanken aussehen, und welchen Nutzen hätten sie? In diesem Feature-Artikel wird eine Klassifizierung von Geld vorgestellt, die zwischen zwei Arten von Kryptowährungen – für Privatund für Großkunden – unterscheidet und sie gegenüber anderen Formen von Zentralbankgeld wie Bargeld und Reserven abgrenzt. Zudem werden die verschiedenen Merkmale von Kryptowährungen von Zentralbanken erörtert und Vergleiche mit bestehenden Zahlungsmitteln gezogen.
BIS Quarterly Review Special Features Series, 2020
Technological innovation is transforming payments. Domestic payments are increasingly convenient,... more Technological innovation is transforming payments. Domestic payments are increasingly convenient, instantaneous and available 24/7. However, shortcomings in access to payments and cross-border payments remain. Lack of access to payments is a problem in some emerging market and developing economies. Improving cross-border payments will require international coordination. Initiatives to improve cross-border payments would benefit from better data to quantify both the extent and the drivers of the problems.
Quasi quotidianamente sorgono nuove criptovalute e molte parti interessate cominciano a chiedersi... more Quasi quotidianamente sorgono nuove criptovalute e molte parti interessate cominciano a chiedersi se le banche centrali non dovrebbero emetterne di proprie. Ma come dovrebbero essere le criptovalute delle banche centrali (CBCC)? E sarebbero utili? Questo articolo fornisce una tassonomia della moneta, individuando due tipi di CBCC – al dettaglio e all’ingrosso – e distinguendole da altre forme di liquidità delle banche centrali, come i contanti e le riserve. Illustra inoltre le diverse caratteristiche delle CBCC e delinea un confronto tra di esse e le opzioni di pagamento già esistenti.
De nouvelles crypto-monnaies apparaissent chaque jour ou presque, et nombreux sont ceux qui se de... more De nouvelles crypto-monnaies apparaissent chaque jour ou presque, et nombreux sont ceux qui se demandent si les banques centrales devraient émettre ce type de monnaies. Mais à quoi pourraient-elles ressembler, et seraient-elles utiles ? Dans cet article, les auteurs proposent une taxonomie différenciant deux types de crypto-monnaies (de gros et de détail) susceptibles d’être émises par les banques centrales, tout en les distinguant des autres formes de monnaies (liquidités, réserves) des banques centrales. Ils présentent les différentes caractéristiques des crypto-monnaies de banques centrales et les comparent aux options de paiement existantes.