2020 Fintech: innovation in payments and settlements
Fintech: innovation in payments and settlements
Agenda
Participants will have access to pre-recorded presentations two weeks before the course
Digital money: a central banker’s guide
Pre-recorded presentation
- Taxonomy of digital money: CBDCs, stablecoins and crypto assets
- Overview of key projects around the globe
- Implications for the work of central bankers, regulators and supervisors
- Key features of emerging regulatory and supervisory frameworks
James Chapman is the senior research director in the Funds Management and Banking Department at the Bank of Canada. He received a Ph.D. in Economics and an MSc in Statistics from the University of Iowa in 2006. He joined the Bank of Canada as a senior analyst in that year. His primary research focus has been on interbank market and financial market infrastructure issues such as liquidity risk and credit risk in large-value payment systems as well as the efficiency of interbank markets. Recently his research focus has evolved to include research on fintech related topics. These topics include the use of distributed ledger technology in financial market infrastructure, specifically the Bank’s Project Jasper, as well as questions related to digital currencies such as Bitcoin, Ethereum and initial coin offerings.
Sandboxes, incubators and accelerators: the key pillar of nurturing compliant innovation
Pre-recorded presentation
- Sandboxes, incubators and accelerators: a central bankers guide
- Role and functions in innovation strategies
- Tips for helping innovation comply with legal and regulatory requirements
- Issues for funding resourcing cross-jurisdictional cooperation
Brian Knight
Senior research fellow and director of innovation and governance
George Mason University
Brian Knight is the director of the Program on Financial Regulation and a senior research fellow at the Mercatus Center at George Mason University. His research focuses on numerous aspects of financial regulation, including the creation of pro-innovation regulatory environments and the role of federalism in fintech regulation. Prior to joining Mercatus, he worked for the Milken Institute, where he headed up the FinTech and Capital Access programs. Mr. Knight also has experience working for a broker-dealer with a focus on the emerging online private-placement market and was the co-founder of CrowdCheck, a company providing due-diligence and disclosure services to companies and intermediaries engaged in online private offerings. Mr. Knight received his Law degree from the University of Virginia and his bachelor’s degree from the College of William and Mary.
Data analytics for AML/CFT: AI and Machine Learning in focus
Pre-recorded presentation
- State of the art in AI and Machine Learning
- Key opportunities for AML and CFT
- Implications for data management, processing and analysis
- Examples of Machine Learning based software solutions for the regulators and the regulated
Kimmo Soramäki is the founder and CEO of Financial Network Analytics (FNA) and the founding editor-in-chief of The Journal of Network Theory in Finance. He started his career as an economist at the Bank of Finland where he developed in 1997 the first simulation model for interbank payment systems. In 2004 while at the research department of the Federal Reserve Bank of New York, Mr Soramäki was among the first to apply methods from network theory to improve our understanding of financial systems. During the financial crisis of 2007-2008 he advised several central banks, including the Bank of England and European Central Bank, in modelling interconnections and systemic risk. This work led him to found FNA in 2013 provide solutions to monitor the complex financial networks that play a continually larger role in the world around us. Mr Soramäki holds a Doctor of Science in Operations Research and a Master of Science in Economics (Finance), both from Aalto University in Helsinki.
CBDC: the state of the art (pre-learning)
Pre-recorded presentation
- Difference (and similarities) between CBDCs and crypto assets
- Implications of CBDCs for the banking sector and financial stability broadly
- Monetary policy: how will implementation change?
- Discussion: what are the next steps and key dynamics?
Professor Ron Berndsen is an independent director of LCH and chairs the LCH Risk Committees. He is also attached to the Tilburg School of Economics and Management at Tilburg University as full professor of Financial Market Infrastructures and Systemic Risk.
Ron is editor-in-chief of the Journal of Financial Market Infrastructures and a member of the Advisory Council of the SWIFT Institute.
The author has been active in the field of payments and market infrastructures for over 15 years. He was Head of the Oversight Department and Head of the Market Infrastructures Policy Department at De Nederlandsche Bank. Ron also served as a member on the Market Infrastructure Board at the European Central Bank and as member of the Committee on Payments and Market Infrastructures at the Bank of International Settlements. He also co-chaired the FSB Group on Cross-Border Crisis Management for Financial Market Infrastructures and was a member of the oversight committees of CLS, EuroCCP, Euroclear, LCH, SWIFT and TARGET2.
He was awarded a doctorate of Tilburg University in 1992 for his PhD thesis in Economics and Artificial Intelligence.
Times in BST
11:00 – 11:30
Course introduction
Opening remarks with the course chair
- Introduction of the chairman
- Overview of the training course
- Discussion of the delegate expectations
11:30 – 12:30
CBDC: the state of the art
Presentation followed by Q&A
- Difference (and similarities) between CBDCs and crypto assets
- Implications of CBDCs for the banking sector and financial stability broadly
- Monetary policy: how will implementation change?
- Discussion: what are the next steps and key dynamics?
Professor Ron Berndsen is an independent director of LCH and chairs the LCH Risk Committees. He is also attached to the Tilburg School of Economics and Management at Tilburg University as full professor of Financial Market Infrastructures and Systemic Risk.
Ron is editor-in-chief of the Journal of Financial Market Infrastructures and a member of the Advisory Council of the SWIFT Institute.
The author has been active in the field of payments and market infrastructures for over 15 years. He was Head of the Oversight Department and Head of the Market Infrastructures Policy Department at De Nederlandsche Bank. Ron also served as a member on the Market Infrastructure Board at the European Central Bank and as member of the Committee on Payments and Market Infrastructures at the Bank of International Settlements. He also co-chaired the FSB Group on Cross-Border Crisis Management for Financial Market Infrastructures and was a member of the oversight committees of CLS, EuroCCP, Euroclear, LCH, SWIFT and TARGET2.
He was awarded a doctorate of Tilburg University in 1992 for his PhD thesis in Economics and Artificial Intelligence.
12:30 – 12:45
Break
12:45 – 13:45
e-krona case study: a digital compliment to cash
Presentation followed by Q&A
- Key features and frameworks of the e-krona project
- Prospects of e-krona as a complement to – or replacement of – physical currency
- The role of communication with – and feedback from – the public
- Overview of necessary legislative and regulatory amendments for a systematic e-krona issuance
Hanna Armelius works as a Senior Advisor at the Sveriges Riksbank. Her main focus is on the macroeconomic effects of structural changes in the payment markets. She has been extensively involved in the analytical part of the Riksbank’s digital currency project (the e-krona project). Hanna has a Ph.D. in Economics from the Uppsala University and has published work in the fields of public economics, monetary policy and digital currencies.
13:45 – 14:00
Break
14:00 – 15:00
Project Jasper: can DLT settle wholesale?
Presentation followed by Q&A
- Motivations and technological foundations behind the Project Jasper
- Lessons learned from key phases of the project
- Overview of the next steps and prospect for the following phases
- Discussion: can a distributed ledger service a core wholesale payment system?
James Chapman is the senior research director in the Funds Management and Banking Department at the Bank of Canada. He received a Ph.D. in Economics and an MSc in Statistics from the University of Iowa in 2006. He joined the Bank of Canada as a senior analyst in that year. His primary research focus has been on interbank market and financial market infrastructure issues such as liquidity risk and credit risk in large-value payment systems as well as the efficiency of interbank markets. Recently his research focus has evolved to include research on fintech related topics. These topics include the use of distributed ledger technology in financial market infrastructure, specifically the Bank’s Project Jasper, as well as questions related to digital currencies such as Bitcoin, Ethereum and initial coin offerings.
15:00 – 15:00
End of day 1
Times in BST
11:00 – 12:00
Payments innovation: understanding the risks of issuance, operations and oversight, focusing on the emergence of stablecoins
Presentation followed by Q&A
- The changing payments landscape – key trends
- Overview of opportunities and risks of disruptive payments innovation
- Key lessons learned from leading projects and initiatives
- How can regulation keep pace with innovation?
Rachel is Manager of the Future of Financial Market Infrastructure team in the Bank of England’s Financial Market Infrastructure Directorate (FMID). Rachel joined the Bank of England in a payments policy role in 2017. After a secondment to HM Treasury’s Financial Services Group, Rachel returned to the Bank of England to manage FMID’s programme of payments policy work on the regulation and supervision of Fintech payment systems with a focus on the international and domestic regulatory approach to emerging stablecoins.
Prior to joining the Bank, Rachel completed a Master of Public Administration (MPA) degree at the London School of Economics, specialising in Public and Economic Policy, and International Development. During her master's degree she worked as an associate at a specialist provider of training and consultancy services in financial crime prevention and anti-corruption, developing projects for government bodies and international organisations primarily in Asia, Eastern Europe and the Caribbean. Prior to that, Rachel worked at an international development NGO developing a regional Asian disaster resiliency microinsurance programme based out of Jakarta, Indonesia. Rachel has an undergraduate degree from Georgetown University, majoring in philosophy with a double minor in economics and Mandarin.
12:00 – 12:15
Break
12:15 – 13:15
How to effectively regulate FinTech – a user’s guide
Presentation followed by Q&A
- Overview of policies and approaches to regulation and supervision of FinTech
- Examples of strategies, frameworks and indicators helping to balance the support for innovation with consumer protection
- Implications for resourcing and institutional organisation of central banks and regulators
- Successes and challenges from delegates’ home jurisdictions
Allan Kearns is head of analytics within the Insurance Supervision Directorate at the Central Bank of Ireland (CBI). In this role, he is responsible for the establishment of a new analytics function as part of the Solvency II change programme within the central bank. The vision for this function is to extract insights from the new Solvency II Pillar 3 reporting to enhance data-driven supervisory and financial stability decision making. Prior to this role, Allan was a founding member of the CBI's risk management division, with responsibility as a deputy chief risk officer for both financial and non-financial risk management frameworks. Allan has an MSc Economics (London School of Economics), an MSc Risk Management (University College Dublin) and a doctorate from Trinity College (Dublin). He lectures on risk management topics domestically and internationally, including governance and culture, and has published on a broad range of central banking topics.
13:15 – 13:30
Break
13:30 – 14:30
What does FinTech mean for central banks, central banking, currencies and payments?
Pre-recorded presentation
- The state of the art of financial technology in 2020
- Key forces, trends and dynamics shaping financial market innovation
- Unavoidable risks, critical challenges and emerging opportunities
- Discussion: how do central banks need to change to make the most of FinTech?
Klaus Löber is the Chair of the CCP Supervisory Committee (CCP SC) in ESMA, which was established in 2020. His areas of responsibility encompass the tasks attributed by the European Market Infrastructure Regulation (EMIR) to the CCP SC, in particular the enhanced supervisory convergence towards EU CCPs and ensuring a resilient CCP landscape in the EU as well the monitoring and supervision of CCPs established in third countries in view of the risks that they may pose to the EU financial system. He is also chairing the ESMA CCP Policy Committee contributing to the EU Single Rule Book in the area of CCPs.
Prior to this role, Mr Löber was the Head of the Oversight Division of the European Central Bank in charge of the oversight of financial market infrastructures, payments instruments and schemes. Earlier positions include the Head of the Secretariat of the Committee on Payments and Market Infrastructures, the global standard setting body in the area of payments, clearing and settlement as well as positions in the European Commission, Deutsche Bundesbank and private practice.
Mr Löber regularly publishes on financial markets legal, regulatory and infrastructure issues and lectures at universities.
14:30 – 14:45
Break
14:45 – 15:15
Delegate action points and course conclusion
Course conclusion
- Summary of the training course
- Discussion of the observed trends and case studies
- Application of learning points in the delegates’ home organisations
- Preparation of action points
Participants will continue their learning post-event
Post training survey and feedback
Course alumni group
CPE/CPD certificate
Chair
Klaus Löber
Chair of the CCP Supervisory Committee
ESMA
Klaus Löber is the Chair of the CCP Supervisory Committee (CCP SC) in ESMA, which was established in 2020. His areas of responsibility encompass the tasks attributed by the European Market Infrastructure Regulation (EMIR) to the CCP SC, in particular the enhanced supervisory convergence towards EU CCPs and ensuring a resilient CCP landscape in the EU as well the monitoring and supervision of CCPs established in third countries in view of the risks that they may pose to the EU financial system. He is also chairing the ESMA CCP Policy Committee contributing to the EU Single Rule Book in the area of CCPs.
Prior to this role, Mr Löber was the Head of the Oversight Division of the European Central Bank in charge of the oversight of financial market infrastructures, payments instruments and schemes. Earlier positions include the Head of the Secretariat of the Committee on Payments and Market Infrastructures, the global standard setting body in the area of payments, clearing and settlement as well as positions in the European Commission, Deutsche Bundesbank and private practice.
Mr Löber regularly publishes on financial markets legal, regulatory and infrastructure issues and lectures at universities.
Learning outcomes
By the end of the training course, participants will have gained new knowledge and a more comprehensive understanding of:
- Fintech driven evolution of RTGS
- CBDCs and their impact on the future of money
- Policies and frameworks for effective supervision and regulation of privately issued crypto assets and stablecoins
- How will the cross jurisdictional regulatory requirements fit in with the technological revolution? – Hands on exercise
- Case studies of cross border payment platforms and their oversight
- Strategies and tools for identification and containment of cyber and financial crime risks
- Tips for balancing innovation with consumer protection
