Ousmene Mandeng conference images

Economics Commentary offers analyses and opinions on international monetary affairs and emerging markets capital markets developments. The content is primarily concerned with changes in the international monetary system and its impact on economic policies and international capital markets and draws extensively on participations in key international economic policy fora. Economics Commentary aims to support the public debate and markets' understanding of major international monetary and emerging capital markets developments.


Maria-Theresa thaler, bitcoin and capital flows

London School of Economics—Reinventing Bretton Woods Committee Conference: Innovations in global financial governance and the role of emerging economies

Buenos Aires, 20 March 2018

[...] I hope to leave you with some confidence that cryptocurrencies have a natural role to play in the international economy, that there is a case to change the geography of money, that there is a continuum of types of money and that adoption of cryptocurrencies should be highest where monetary experiences have been bleakest. [...]

Cryptocurrencies challenge the status quo

VOX, with Piroska Nagy-Mohacsi, 15 March 2018

Cryptocurrencies have been the subject of recent attacks by official sector representatives, and the G20 finance ministers will consider regulatory proposals at their next meeting in Buenos Aires. This column argues that while cryptocurrencies present certain risks, they also represent an important innovation that promises to enhance choice and efficiency in monetary transactions. A proportionate, risk-based regulatory approach is required to accommodate differential attitudes and experiences and to avoid stifling innovation and competition. This implies having an open debate before sweeping regulatory action. [...]

Completing Europe's monetary union

OMFIF News and Commentary, 15 March 2018

The new German government may propose as one of its first European policy initiatives the establishment of a European Monetary Fund, a critical missing piece in the euro area monetary architecture. The coalition treaty between Chancellor Angela Merkel's Christian Democrat/Christian Social Union group and the Social Democratic Party states prominently that the 'existing European Stability Mechanism is to be developed into a European Monetary Fund'. The idea of an EMF is not new and failed a few times in the past to get off the ground, notably when the European Monetary System was set up in 1978 as the forerunner to economic and monetary union. Yet, in the light of continuous nervousness regarding prospects for the euro area, exacerbated by an unfavourable Italian election outcome, an EMF would signal that the bloc is willing to do what it takes to strengthen confidence. [...]

Venezuela’s petro digital currency

22 February 2018

Venezuela launched the pre-sale of its digital currency petro on 19 February. It is the first government to issue a digital currency and hopes to establish a new ecosystem around the token. Because the government of Venezuela is behind it, it raises naturally fundamental doubts about its credential as a currency. Its valuation makes it a more an oil price-linked voucher. It does not reflect the underlying ideas and ideals of cryptocurrencies. [...]

Public trust and cryptocurrencies

21 February 2018

Bitcoin and other cryptocurrencies have recently been subject to severe attacks from the official sector denouncing them as a “bubble” and “Ponzi” scheme. Mark Carney, governor of the Bank of England, said on 19 February that bitcoin has failed as a currency amid its extreme volatility. The G20 is now called upon to offer some comprehensive regulation. Volatility though may be a poor guide to assess currencies. [...]

Cryptocurrencies, monetary stability and regulation: Germany’s nineteenth century private banks of issue

Institute of Global Affairs, London School of Economics and Political Science, 14 February 2018

The paper classifies bitcoins and other cryptocurrencies as money, reviews their possible economic impact and proposes a regulatory approach based on Germany’s nineteenth century private banks of issue. Cryptocurrencies represent important monetary innovations and have reinvigorated interest in and debate about notion and meaning of money. They aim to disrupt and challenge existing monetary and financial arrangements. Their market valuations though highly volatile may become substantial quickly. Their impact on the financial system therefore causes disquiet. It has already led to various regulatory measures and calls for more. However, few discussions on regulation have focused in earnest on the possibility of a sustained significant expansion of cryptocurrencies as money. [...]

European Monetary Fund—A misnomer

23 January 2018

The prospects for a European Monetary Fund (EMF) are good. The agreement of last Sunday to initiate formal talks between the SPD and CDU to form a government in Germany made an EMF significantly more likely. An EMF has been promoted by the CDU and pushed by the SPD and may be one of the first European measures of the new government. However, an EMF is unlikely to address monetary issues or become a fund. The misnomer obfuscates what an EMF should and likely will be doing. European Fiscal and Financial Support Bank would be more fitting. [...]

Special Drawing Right (SDR)

Collection of comments on the SDR