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Please find some selected news from Banque de France’s office in Singapore.

What will shape the future of crypto-assets? – Banque de France webinar – 15 Jun 2021, Speech by Denis Beau, First Deputy Governor of Banque de France

So far, crypto-assets have proven to be much less efficient than our traditional currencies, for different reasons, starting with price volatility, transaction costs and delays, which make them difficult to use as a means of payment, not to mention the risks they expose their users and service providers.

However, we cannot ignore the potential for innovation of crypto-assets and their underlying technology, the technique of distributed ledgers or blockchain. Already in 2017, with the Madre project, the Banque de France was one of the first central banks in the world to use this blockchain technology for an interbank use case. At the rate of innovation, it is a long history, but since then we have been closely monitoring the development of this vibrant blockchain and crypto-assets ecosystem, the opportunities it creates and the risks it carries.

What will shape the future of crypto-assets?

 

An article on What explains the persistent weakness of euro area inflation since 2013?

In this bulletin, the authors evaluate the contributions to this decline of two standard determinants of inflation: economic slack and the trend in commodity prices, especially oil prices. To do so, they use an augmented Phillips curve that incorporates these determinants as well as the impact of the non-standard monetary policy measures implemented since 2014. The authors show that the bulk of the decline in inflation can be explained by the disinflationary nature of the two determinants since 2013.

What explains the persistent weakness of euro area inflation since 2013?

 

A working paper on Is a Money-financed Fiscal Stimulus Desirable?

We analyse the redistribution channel of a money-financed versus debt-financed fiscal stimulus in a Borrower-Saver framework. The redistribution channel is larger when we consider a money-financed fiscal stimulus. However, it generates also larger welfare losses than a debt-financed fiscal stimulus, particularly in a borrower-saver framework due to the additional presence of the consumption gap with respect to a representative agent model.

Is a Money-financed Fiscal Stimulus Desirable?

 

A press release on The ACPR and AMF Joint Unit for Insurance, Banking and Retail Investment publishes its 2020 annual report

In 2020, in the context of the health crisis, the Joint Unit of the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Autorité des Marchés Financiers (AMF) continued to monitor and control commercial practices and to fight against financial scams. Ten years after it was created, the Joint Unit has established itself in the regulatory landscape as a forum for enhanced cooperation between the two authorities, for the protection of financial sector clients.

The ACPR and AMF Joint Unit for Insurance, Banking and Retail Investment publishes its 2020 annual report

 

A blog note on The differentiated impact of the crisis on companies’ financial situation

Between the end of December 2019 and the end of March 2021, companies' gross debt increased by EUR 224 billion, while their cash position rose by EUR 215 billion. Based on a first analysis of the 205,392 balance sheets received by the Banque de France, it is possible to break down these overall reassuring figures in more detail: 6 to 7% of the total number of rated companies could face difficulties when the support measures are lifted.

The differentiated impact of the crisis on companies’ financial situation

 

A working paper on Job Polarization and the Flattening of the Price Phillips Curve​​​​​​​

In the European Monetary Union (EMU), the negative relationship between price inflation and unemployment –the price Phillips Curve (PC)– has recently weakened. At the same time, the share of routine employment has declined, giving rise to a phenomenon called job polarization. This paper combines these two apparently unrelated facts and shows that the change in the occupational composition of the labor market is an important driver of the flattening of the PC. In other words, the paper highlights the importance of labor market characteristics, and in particular the heterogeneity across occupations, for the structural relationship between prices and unemployment.

Job Polarization and the Flattening of the Price Phillips Curve

 

Banque de France ’s office in Singapore aims to provide enhanced monitoring of Asian economies and financial systems, and forge closer relations with central banks and financial authorities in the Asia-Oceania region. Banque de France strengthens its operational capacity to better serve international official sector entities in the Asian time zones. 

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