It is the base rate of interest for the UK economy and has a strong impact on the short and long-term … It is not something we talk about very much. ‘Stablecoins’, a form of crypto-assets are probably the best known of these. The second area is the role that access to public money may play during times of stress when confidence in the issuers of private money comes under threat. In thinking about these possible roles of generally available public money it is important to think beyond the status quo in which private money is issued only by tightly regulated commercial banks. Money is not only a social convention, it is a very dynamic one. As I set out earlier, there is now the very real prospect of non-banks, including the large technology platforms or ‘Big Techs’, issuing new forms of digital money, such as ‘stablecoins’footnote [17] for general payment purposes. We’d also like to use some non-essential cookies (including third-party cookies) to help us improve the site. In Hong Kong, banknotes are issued by three commercial banks (under license from the HKMA). These notes and coins are denominated in Pounds Sterling, the currency of the UK. Around 95% of the funds people hold that can be used to make payments are now held as bank deposits rather than cash. As the economy become increasingly digitised, the social consequences of exclusion from digital money will become more severe. And, outside periods of crisis, the type of money they use, what and who stands behind it, is not something that particularly interests them. We will shortly publish another discussion paper on some of the public policy issues generated by new forms of digital money. The extent to which digital public money in the form of a central bank digital currency could play these roles would depend on its design - most particularly on its interaction with the private sector. These concern the wider benefits from a well-functioning money and payments ecosystem for economic activity. The balance will I am sure need to be struck in the same place for digital private and public money alike. As the only digital money available to the public is private, commercial bank money, the shift from physical cash to digital payment over recent decades has meant a shift from public to private money. For more information on how these cookies work please see our Cookie policy. ... BoE Deputy Governor Jon Cunliffe … Found inside – Page 6... the Financial Services Authority ( FSA ) and the Bank of England - Mr Jon Cunliffe , then Managing Director , International Finance , HM Treasury ... I have, over the years sometimes asked the question of those I have met. Bank of England (BOE) Monetary Policy Committee (MPC) Member Sir Jon Cunliffe (since November 2013) is to speak. Jon Cunliffe is Deputy Governor:Financial Stability at Bank of England. Cunliffe listed several factors … Bank of England Deputy Governor Jon Cunliffe said cryptocurrencies may represent a threat only if they move from retail to wholesale. But these not so distant episodes underline that threats to confidence in money or particular forms of money, is not just something in the history books. This is sometimes also refer to as electronic money, but I will use the term digital money here – which avoids confusion with the narrow development of ‘e-money’ institutions. The concept of a central bank digital currency may be confusing to some but Sir Jon Cunliffe, the Bank's deputy governor for financial stability, said it was actually quite straightforward. It is the Bank of England, on behalf of the state, that is charged with ensuring the stable value of the currency by keeping inflation at its 2% target. Physical symbolism in establishing this commitment may be significant, that is to say users of money place value on role of possession of a physical object establishing the right to a claim. But it is increasingly a backstop rather than a fully functioning alternative. Physical cash provides a backstop. The Bank of England will announce its June interest rate decision at 1100 GMT on Thursday in the shadow of a bigger-than-expected rise in … Looking ahead, as payment options proliferate, the option of using digital public money as an alternative to private money could play an important role in anchoring costs. Browse all consultations. [7], Cunliffe is overseeing 'Project Bookend', the Bank of England's project to examine the possible economic effects of the UK leaving the EU following the upcoming referendum. Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at the1st Single Resolution Board Annual Conference, Brussels, 29 April 2016. Whatever the outcome, it should be based on a careful and thorough assessment of the implications of such a change and of the alternatives that may be available to us. Written evidence can be found on the Committee's website at www.parliament.uk/treascom He is a member of the G20 Financial Stability Board Steering Committee. Found inside – Page 261As Sir Jon Cunliffe, Deputy Governor Financial Stability, pointed out at the beginning ... at the Bank of England expressed it, 'No banking crisis is alike. The views expressed here are not necessarily those of the Bank of England, the Monetary Policy Committee or the Financial Policy Committee. The Bank of England has widened access to its central payments infrastructure to include non-bank payment firms. Before joining the Bank, Jon was the UK Permanent Representative to the European Union, effective from 9 January 2012. This is an area in which the Bank has a particular interest but where responsibility is shared across a range of public authorities that will be involved in the work of the Task Force. Found inside – Page 81... Stephen Nickell to the Budget Responsibility Committee Appointment of Sir Jon Cunliffe as Deputy Governor of the Bank of England Re-appointment of Dr ... Money is in the end a social convention that can be very fragile under stress. Sir Jon Cunliffe: House prices 'biggest risk' to UK economy. Jon Cunliffe “The Taskforce will be co-chaired by Deputy Governor for Financial Stability at the Bank of England, Jon Cunliffe, and HM Treasury’s Director … As we have seen over many years with the banking system, future private money and payments providers may not have the commercial incentives to provide useable services for the unbanked and other parts of the population. It is not clear to me to what extent the general public understand this distinction between public and private money – or even that for most of the time they are using private money. The proportion of adults with at least one credit or charge card has increased slightly over the past few years with 68% of adults having at least one credit or charge card in 2019. You may disable these by changing your browser settings, but this may affect how the website functions. A sea change in the issuance and circulation of public and private monies could make general access to a digital form of central bank money crucial for ensuring financial stability in future according to the Bank of England’s deputy governor Jon Cunliffe.. Cunliffe reflected on past, present and future trends in the widespread use of private money issued by commercial … This framework has a number of important elements. Sir Jon Cunliffe career profile This article is more than 7 years old The new Bank of England deputy spent most of his career in the Treasury, and was a … Jon discusses investment and the finance that supports it in the modern British economy, drawing on new work by the Bank of England on … Found inside – Page 72Cœuré was appointed co-chair (with Jon Cunliffe, deputy governor of the Bank of England and chair of the Committee on Payments and Market Infrastructures) ... Financial Stability : Oral evidence, Thursday 1 February 2007, Sir John Gieve and Mr Nigel Jenkinson, Bank of England; Mr Jon Cunliffe and Mr Clive Maxwell, HM Treasury; Mr Hector Sants and Mr David Strachan, Financial Services Authority This private money is not a claim on the state or backed with the resources of the state. Found inside – Page 110... Stephen Nickell to the Budget Responsibility Committee Appointment of Sir Jon Cunliffe as Deputy Governor of the Bank of England Re-appointment of Dr ... Cryptocurrencies aren't yet big enough to pose a systemic risk to financial stability, Bank of England Deputy Governor Jon Cunliffe said Wednesday. I think, however, that it is a relatively safe bet that the experience of the last 12 months will lead to further acceleration of the move from physical to electronic/digital money and with it a shift from public to private money. Sir Jonathan Stephen Cunliffe, CB (born 2 June 1953) is a senior British civil servant, currently serving as Deputy Governor of the Bank of England for Financial Stability. Jon Cunliffe is Deputy Governor-Financial Stability at Bank of England. Found insideBack in July 2014, Bank of England deputy governor Sir Jon Cunliffe issued a stark warning, saying that the housing market poses the 'biggest risk' to the ... These changes have been very marked in the UK where they have mainly taken the form of the issuance of credit and debit payment cards to the general publicfootnote [6], the development of a Faster Payments System and the emergence of e-money, a derivative of commercial bank moneyfootnote [7]. Jon Cunliffe: Housing tools revisited. Speech. I would like to thank Shiv Chowla, David Copple, Ben Dovey, Julian Schelle, George Barton, Ridheema Manek, Miranda Hewkin-Smith and Cormac Sullivan for their help in preparing the text. A similar arrangement exists in Scotland and Northern Ireland. In the model, digital public money would operate alongside private money - as cash does now. Jon Cunliffe talks about why this is. Monetary and fiscal Policy : Present successes and future problems, 3rd report of session 2003-04, Vol. 2: Evidence Found inside – Page 251Cross-border banking and global liquidity. ... Bank of england [online]. ... jon-cunliffe-speech-at-oxford-economics-society Cutts, R. L. (1990). Found inside – Page 82... Stephen Nickell to the Budget Responsibility Committee Appointment of Sir Jon Cunliffe as Deputy Governor of the Bank of England Re-appointment of Dr ... Sir Jon Cunliffe said that low interest rates and the temporary stamp duty holiday had fuelled a surge in house prices in the past year and there were “reasons to believe that . But cash, and by extension public money, is becoming an ever smaller fraction of the money we use in the UK and increasingly unusable in a digital world. But regulation alone is not always the silver bullet for complex, multidimensional public policy objectives. Digital forms of payment overtook cash in 2015 and now make up three quarters of all payments, with debit cards alone accounting for 42% of payments. Found inside – Page 24Sir Jon Cunliffe, Deputy Governor of the Bank of England has referred to need for regulators and supervisors to 'up their game' as the importance of ... However, e-money firms are not subject to many of the same safeguards as retail deposits, most notably deposit insurance. He lectured at the University of Western Ontario, before joining the UK Department of the Environment and Transport in 1980. Competition acts a spur to innovation. The Bank of England has issued banknotes for over 300 years. [8], Cunliffe suggested in a March 2014 speech at Chatham House that the domestic banks were too big to fail (TBTF), and instead of the nationalisation process used in the case of HBOS, RBS and threatened for Barclays (all in late 2008), could henceforth be bailed-in. There are, however, on the near horizon newer technologies and innovations, such as tokenisation and distributed ledger, which may further transform the money we use. The Bank of England, like many other central banks, has been exploring these issues in recent years. Sir Jonathan Stephen Cunliffe, Central Bank is a senior British civil servant, currently serving as Deputy Governor of the Bank of England for Financial Stability. There are other areas in which there may be risks in allowing publicly available state money to disappear and benefits from a CBDC. A recent Bank of England survey, for example, found that 70% of respondents were using less cash than prior to the pandemic. We’d also like to use some non-essential cookies (including third-party cookies) to help us improve the site. Given we have the credible public authority framework for private money I described earlier, why should the state need to be involved in the issue of money to the public in competition with the private sector? Jon Cunliffe talks about future of money in the UK in an increasingly digital world. Sir Jon Cunliffe, Deputy Governor, Bank of England, will discuss how the Bank is engaging with the UK and international payments landscapes. Deposit protection, in such a world, only enables depositors to exchange the claims on one bank for claims on another. Jon Cunliffe, the deputy governor of the Bank of England, talked about cryptocurrency and whether it poses financial stability risk in an interview with CNBC Wednesday. We may not be there yet. [10], Deputy Governor of the Bank of England for Financial Stability, British Permanent Representative to the EU, Department of the Environment and Transport, "Brown brings civil servants back to the heart", telegraph.co.uk: "BoE has 'no confidence' a failing big bank could be saved" (Wilson) 17 Mar 2014, "Email mistake reveals Bank of England's EU exit project", European and Global Issues Secretariat homepage, https://en.wikipedia.org/w/index.php?title=Jon_Cunliffe&oldid=1038436844, Second Permanent Secretaries of HM Treasury, Pages using infobox officeholder with unknown parameters, Creative Commons Attribution-ShareAlike License, Governor: Mark Carney (July 2013 – present), This page was last edited on 12 August 2021, at 14:59. He has specific responsibility within the Bank for financial stability, for the supervision and oversight of financial market infrastructures and payment systems and for international. The rules surrounding banks' risk buffers may need to change to encourage lenders to tap their capital and avoid a squeeze on credit following the coronavirus pandemic … Sir Jon Cunliffe became Deputy Governor for Financial Stability on 1 November 2013. In the ten years before the introduction of the current monetary stability framework, inflation was on average twice as large and twice as volatile as in the following period. They may never happen of course. They offer electronic money, with client funds held at a commercial bank (and therefore backed at the central bank). The promise to pay is, like all promises, intimately tied to credibility. Payment card fees, for example, are capped in the UK and the Payment System Regulator acts as the economic regulator of the main UK payment systems. (I do not propose to wrestle with that question today- the Bank of England will shortly be issuing a discussion paper on the public policy implications of non-commercial bank digital moneyfootnote [12]). For context, the average growth rate of NIC over the preceding five years was 0.5%. The fact that, unlike in some periods of history, we do not at present think much about these things and that people in the UK have a general confidence in the money they use regardless of its form and issuer is, I think, a good thing. But on the basis of the work the Bank has done so far, I can perhaps set out some preliminary views on where some of the benefits might lie and where, conversely, there might be risks in allowing publicly available state money to disappear. Digital public money, appropriately designed, may therefore have an important role to play in ensuring inclusion. These risks will need to be very carefully evaluated in any assessment of whether we should be prepared to let generally available, useable public money wither as the digital age progresses or whether the state should issue its own digital currency.
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