Will central-bank digital currencies break the banking system?
IMAGINE IT IS 2035 and a financial crisis is raging. Credit is drying up; banks’ share prices look like ski slopes and every news report features sweaty traders in shirtsleeves tugging at their collars. You log on to your banking app and peer anxiously at your savings. You could transfer them to another bank, but none seems safe. Fuelling a traditional bank run by withdrawing physical banknotes, even if there were any branches left, would be tragically passé. Luckily, there is a new escape route. At the touch of a button, you can move your funds into a central-bank digital currency (CBDC), a government-issued virtual store of value that is completely safe.
This is one scenario worrying economists working on CBDCs (of whom there are many: a survey at the start of last year found that more than 80% of central banks were studying the subject). There are many potential advantages to publicly backed digital currencies. They might make payments easier. They might “democratise” central-bank money, the part of the central bank’s balance-sheet which, unlike physical cash, only banks can access now. And they would reduce the risk that cryptocurrencies replace government tender; bitcoin has been on a tear lately, and Facebook’s digital coin—which on December 1st changed its name from “Libra” to “Diem”—will reportedly launch in January. But wouldn’t CBDCs also make it dangerously easy to flee the banks in times of stress?
It is not just in a crisis that CBDCs might compete with banks. They would be attractive assets to hold in normal times, too, especially if, like today’s central-bank money, they were a tool of monetary policy and therefore paid interest (assuming that rates are solidly positive again by 2035). Thus, commercial banks might be drained of the deposits with which they today fund their lending. Disintermediation of the banking system might make impossible the financial magic that allows households to pair long-dated mortgage borrowing with instantaneously redeemable deposits.
The budding architects of CBDCs are looking for ways round the problem. One option, which has been suggested by researchers at the Bank of England and the European Central Bank, is to limit the amount that can be held in a CBDC. Another idea, pointed out in a recent paper by Sarah Allen of the Initiative for Cryptocurrencies and Contracts, a research group, and 12 co-authors, is to rely on banks to manage the public’s holdings of CBDCs, much as many people rely on “wallets” to hold their cryptocurrency (though if the public could not hold CBDCs directly, it would not be much of an improvement on existing central-bank digital money).
崭露头角的CBDC设计师们正在寻找解决这个问题的方法。英国央行和欧洲央行的研究人员提出了一种方法：限制能存在一种CBDC中的金额。研究小组加密货币和合约倡议组织（Initiative for Cryptocurrencies and Contracts）的萨拉·艾伦（Sarah Allen）和12位合著者近期在一篇论文中提出了另一个想法：依靠银行来管理公众持有的CBDC，就像许多人用“钱包”来装加密货币一样（不过如果公众不能直接持有CBDC，那么也就说不上对现有的央行数字货币有多少改进了）。
The problem of disrupting the banks may be avoidable with clever engineering. But it would be wise to consider whether it even needs avoiding in the first place. For those willing to entertain futuristic ideas, CBDCs may offer an opportunity to rethink the financial system from the ground up.
Several research papers, as summarised by Francesca Carapella and Jean Flemming of the Federal Reserve in a recent review, argue that central banks could preserve maturity transformation by reordering the chain of funding. Today, households deposit money at banks, which park funds at the central bank. If people prefer CBDCs, however, the central bank could in effect pass their funds on to banks by lending to them at its policy interest rate. “The issuance of CBDC would simply render the central bank’s implicit lender-of-last-resort guarantee explicit,” wrote Markus Brunnermeier of Princeton University and Dirk Niepelt of Study Centre Gerzensee in a paper in 2019. Explicit and, perhaps, in constant use.
有几篇研究论文认为央行可以通过对融资链重新排序来保留期限转换。美联储的弗朗西斯卡·卡拉佩拉（Francesca Carapella）和让·弗莱明（Jean Flemming）最近在一篇评述中对这些论文做了总结。如今，家庭把钱存入银行，银行把资金存入央行。但如果人们更喜欢CBDC，那么央行实际上可以按政策利率向银行放贷，以此把这些资金转给银行。“CBDC的发行只会让央行隐性的最后贷款人担保显性化。”普林斯顿大学的马库斯·布伦纳迈尔（Markus Brunnermeier）和格岑赛研究中心（Study Centre Gerzensee）的德克·尼佩尔特（Dirk Niepelt）在2019年的一篇论文中写道。不仅会显性化，而且可能会被经常使用。
More central-bank lending might sound like an unwarranted expansion of government. But today’s market for deposits is hardly laissez-faire. It is not as if households inspect banks’ loan books before entrusting them with cash; they rely on the backstop of government-provided deposit insurance. And deposits are increasingly concentrated in big banks. (In fact, a recent working paper by researchers of the Bank of Canada finds that, by increasing competition for deposits, a CBDC could increase bank lending and GDP.)
The real problem with central-bank financing of banks is the risk of default. To avoid picking winners, policymakers would probably need to fund any institution that can provide satisfactory collateral. Determining which loans and other assets qualify is uncomfortable work. But central banks already make such evaluations in times of crisis. The understanding that they will accept only high-quality assets, plus minimum equity requirements to protect creditors, is supposed to prevent moral hazard.
Another idea is to make banks fund themselves with much more equity, rather than rely on deposits. That would make them look more like today’s mutual funds or other unleveraged investment vehicles. This is precisely what economists such as John Cochrane of Stanford University and Laurence Kotlikoff of Boston University have long advocated: that lenders should shed their dependence on flighty sources of financing, and that households’ funds should instead be parked in completely safe assets. For Mr Cochrane, CBDCs are an opportunity to pursue such “narrow banking”.
另一种想法是让银行大幅扩充股本为自己筹集资金，而不是依靠存款。那会让它们看起来更像现在的共同基金或其他无杠杆投资工具。这正是斯坦福大学的约翰·科克伦（John Cochrane）和波士顿大学的劳伦斯·科特利科夫（Laurence Kotlikoff）等经济学家长期以来的主张：银行应避免依赖不稳定的融资来源，而家庭存款应该放在完全安全的资产上。在科克伦看来，CBDC提供了发展这种“狭义银行业务”的机会。
To fear disintermediation at the hands of CBDCs is to believe that narrow banking would starve the economy of something it needs, and that today’s “fractional-reserve” system must be preserved. But banks are not necessary for lending and borrowing to take place—in America a high share of this activity takes place in capital markets instead. If bank credit must be kept flowing, governments could subsidise it directly—making explicit what today’s architecture obscures. Better that than suppressing useful technological innovations.
Making subsidies explicit, however, is not always comfortable for the beneficiaries—or for regulators; obvious support attracts more public opprobrium. The real risk of CBDCs to the financial system may be that they eventually precipitate a new kind of run: on the idea that banks need to exist at all. ■