Zoekresultaten

What to do about Europe’s market fundamentalism:

Humanising the ‘dungeons’ of the bank

This paper reveals how the automatising of protocols ignited a public conflict between Dutch banks and their Small and Medium-sized Enterprise (SME) clients in the years after the Global Financial Crisis. The bank’s “infirmary departments” for Financial Restructuring and Recovery (FR&R) were accused of (mal)treating SMEs. The conflict resulted in no formal regulatory or legal change despite public support. Instead, the banks created self-regulation to improve communication with SMEs, leading to shifts in governing FR&R for SMEs. This way, the banks mitigated significant negative symptoms of automation and solved the conflict with the SMEs while keeping FR&R and ongoing automation intact. The research uses an interdisciplinary analytical framework to understand national financial conflicts in a digitalised (business) world. It contributes to the theory of institutionalising values in discursive contests between action fields. The paper highlights the material and causes of normative conflicts of interest among critical actors in established public-private networks through discourse analysis and process tracing.

Regulatory Response to the Rise of Fintech Credit in The Netherlands

The rise of financial technology (fintech) driven business models in banking poses a challenge for financial regulators. While the positive effects on the banking sector in terms of greater diversity and competition are generally recognized and encouraged by regulators, the nature of fintech business models may increase the risk of financial instability. Regulators are exploring ways to resolve this dilemma. The paper in hand makes a contribution to the literature by providing a framework for resolving the dilemma that is evaluated in the context of the regulatory response to the rise of fintech credit in the Netherlands. The semi-structured interviews which we conducted with four senior Dutch regulators resulted in three areas that–from their perspective–required urgent action: fintech credit companies need to lower the risk of overlending, increase pricing transparency, and improve lending standards. These findings were confirmed by the results of they survey among fintech credit clients. The current regulatory response to the rise of fintech in banking in the Netherlands provides an interesting case study that delineates the features of the future regulation of fintech in banking.

Why European Central Banks Will Suffer Steep Losses

In September, the president of the Dutch central bank wrote what may have been the most remarkable letter of his career: it said that the ECB’s interest rate hikes will lead to losses for De Nederlandsche Bank (DNB) for the first time since 1932. Several countries throughout the eurozone are facing a similar problem. To absorb the losses of their central banks, European taxpayers risk having to pay tens or even hundreds of billions of euros a year. Meanwhile private banks get that same amount of money without having to do anything in return. The ECB now stands ready to make a crucial policy decision to determine whether billions in taxpayer money will again flow to the banking sector.

A digital euro for the people

The recent bank collapses and bailouts highlight the fragility of the banking system and our bank deposits. The digital euro is an opportunity to reconfigure our monetary system to serve the interests of people and society, by making money safer and more inclusive. However, the European Central Bank’s (ECB) current proposal for a digital euro falls short of this potential. The current plan relies heavily on private financial intermediaries and envisions putting important limitations on the use of digital euros, thereby impacting its capacity to be a universally accessible public good and risking undermining the uptake of the digital euro. By heeding to the bank lobby and baking their interests into the design of the digital euro, the ECB is missing an opportunity to develop an appealing and public digital alternative to private bank deposits. The digital euro must be developed with the aim of benefiting people and society over private interests, and these considerations should guide its design. In the short term, the digital euro should: 1. Be universally accessible. People should be able to access digital euros through a diverse range of intermediaries, which include non-profit and public entities. Implementing a tiered identification system for account-based digital euros, and introducing a value-based option, would ensure the availability of digital euros to the most vulnerable segments of society. 2. Be free of cost for users. Any future legislative framework on the digital euro should include a list of basic services that should be provided for free to users, such as opening and managing an account and the provision of a payment instrument (e.g. a card). 3. Offer a high level of privacy and data protection. Cash, which is fully anonymous, should be used as the baseline when developing the digital euro. A value-based option should be introduced alongside an account-based one, and it should be designed to be fully anonymous. For the account-based option, a ‘privacy threshold’ can ensure that users’ data for small transactions is protected. 4. Have a clear European Central Bank branding. Clear branding will help to differentiate public digital euros from private bank deposits. 5. Bring resilience to the payment system. By providing an offline value-based option, and by ensuring that the digital euro’s legal and technical core infrastructure is public and works independently of any private system, we can offer an alternative to existing payment rails and increase resiliency in case of outages. The digital euro is also an opportunity to improve financial stability by transforming the banking system, and helping central banks to more effectively carry out their monetary policy. The design of the digital euro should be flexible enough to allow for the achievement of these longterm goals, and more research should be conducted to explore how different features could help achieve them. For instance, a digital euro without any holding limit could reduce moral hazard in the banking sector, and the adjustment of interest rates on digital euro deposits and direct monetary transfers could improve the transmission of monetary policy.

Triodos Bank - mission-driven success pays off

The story of Triodos Bank over the last 20 years reads as a success story. It is also a story about how principles are guiding business. However, principles need a pragmatic approach in order to be successful. Over the past 30 years the bank’s management has succeeded in balancing a clear focus to create value for society with the objectives of a financially sound company. This case will describe this development, focusing on a period of rapid growth from 1990 to 2009, in which the organization grew from a small entity to a serious bank.