24.01.2018

Can developing nations rise more inclusively when economic reality meets future technologies?

The financial system can be seen as a series of interconnected balance sheets that links the buyer with a seller where somebody's asset is a counterparty's liability and links corporations and individuals in the economy. While the complex interconnectedness of the financial actors enables efficient transactions, it also poses risks for financial stability. Today, large financial corporations are particular exposed to potential risk concentration. New technologies might enable to not only decipher risk aggregation earlier but also to mitigate such in anticipation.
The moderator: Dr. Kaspar Bänziger. Speakers: Anna Gincherman, prof. Ugo Panizza, Taynaah Reis, Idris Al Senussi.
According to Ugo Panizza (prof. Int. Economics. Pictet Chair in Finance and Development; Director, Center for Finance and Development, Graduate Institute Geneva): "Large international banks play a key role in small countries as they serve as "Correspondent" banks that clear smaller banks' foreign-currency transactions. However, higher compliance costs linked to Anti-Money Laundering/Combating the Financing of Terrorism ("AML/CFT") are pushing international banks away from countries where compliance costs surpass potential profits. This process, known as "de-risking" has left many countries without a correspondent bank or with just one correspondent bank. De-risking limits financial inclusion and entrepreneurship in countries that need it the most and increases the cost of sending remittances to these countries. Can cryptocurrencies help? What are the opportunities? What are the challenges? More in general, what is the role of cryptocurrencies in promoting financial inclusion and financial stability in the poorest countries?" All these questions have been raised during the panel discussion.
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