The winners of the Nobel Prize in Economics this year, Ben Bernanke, Douglas Diamond and Philip Dybvig just have written on the nature of banking systems and the importance of regulatory systems and deposit insurance to guarantee the stability of the financial systems”, Pesce explained and then added: “I think these present a special quality that is that there is a set of actors with different behaviors that behaves harmoniously in a stable way. That stability is put into play when depositors question it and that’s where Public institutions play an important role.
For the head of the BCRA, the 2008 crisis left many lessons in relation to the importance of regulations. “We thought it was possible self-regulation mechanism through capital requirementsthe external audits and risk rating agenciesbut that is how we had to cope with the crisis of 2008. The new demands of liquidity that emerged after the regulatory framework called Basel III allowed the financial system was more solid and stable”, held.
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Pesce also spoke of the new challenges facing the financial system. “The first is the role of global investment funds that handle volumes of financial assets and liquidity that can call into question the stability of economies and infect financial systems. We have already raised this issue in the G20 and in the FSB and work is being done to prevent them from distorting especially small capital markets”he pointed.
Pesce later added: “Another challenge is the gradual disappearance of material money that has already entered an irreversible path. Each country dealt with this problem differently. In Argentina we have an advantage, in 2018 already 80% of the adult population had a bank account since the social assistance system of our country is based on the distribution of money through bank accounts, which gives it transparency. And furthermore, after the pandemic crisis, 98.5% – almost the entire adult population – have a bank account or a virtual wallet. The Argentine Central Bank has regulated the intervention of non-bank wallets: these institutions cannot carry out financial intermediation and are obliged to deposit in regulated institutions 100% of the deposits they receive, which guarantees that this transactional money has no other uses”.
Finally, the The president of the BCRA stated that in the near future it will be necessary to deal with the potential risks that non-public currencies based on the blockchain technologies that are not supported by any state institution or underlying assets.
Source: Ambito
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