Short time after the first financial crisis of globalization (2008-2009), a number of changes started to dominate the financial and banking world. Household and companies were confronted with a series of new rules and procedures aimed to protect both banks and the public. In most of cases they led to an increase of the lending cost and the requirements for money laundry avoidance and prevention of terrorist financing made access to money slower and hungry for paper. Technology and AI brought an alternative to the market, which proved to be faster, cheaper and with much less hurdles. They are all private initiatives, spined up by startups and the wisdom of putting IT knowledge to service the young entrepreneurs. The crypto assets, blockchain, fintech, digital payments and digital currencies are all part of the new developments. The emergence of technology as the new layout for banking led major financial powers and the international financial institutions to look more attentive to the challenges they face, and decide that official digital currency should not wait for too long. Currently, more than 70 central banks of the world are engaged in the process of preparing for the near future, among which ECB is a front runner.

The pandemic caused by COVID-19 has shocked the whole world and is another huge blow to the world economy after the financial crisis that erupted in 2008. A sanitary crisis is interweaving with a very severe economic and social crisis. Although most economies seem to have got out of the deep hole caused by The Shutdown, a steady recovery is likely to be difficult and painful, surrounded by big uncertainties and contradictory effects. Much of economic activity is badly hit, not a few companies may not be able to survive, unemployment has been growing rapidly[1], and repair efforts will be time consuming.

In “Limits and pitfalls of QE in emerging economies”(OpiniiBNR, 14 August) I argued that, while central banks in advanced economies undertake quantitative easing (QE) in order to mitigate the shock of the Pandemic and the economic crisis, this kind of operations needs to be contemplated with caution in emerging economies. A reaction to my text suggested that the accumulation of net foreign assets (NFA) in emerging economies (EMEs) could be seen as a form of QE. I argue below that this is not an appropriate analogy. But first, I reiterate my view as to why EMEs have to treat QE with much caution.

The coronavirus pandemic has stunned Europe, and indeed the entire world. Although the likelihood of this kind of pandemic was sounded off by not a few high-profile voices quite a while ago, its devastating impact reveals how unprepared medical systems and how defective our prevention schemes have been. But, like in times of war, an unprecedented resource mobilisation has been mounted to fight the coronavirus, while governments and central banks have summoned a wide range of tools to mitigate the impact of the lockdowns.
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Disclaimer este o platformă - forum pe care specialiştii din Banca Națională a României dezbat principalele evoluții macroeconomice și financiare locale și internaționale. Opiniile exprimate sunt strict personale, nu reflectă poziția oficială a Băncii Naționale a României și nu implică sau angajează în niciun fel această instituție.
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