The OMFIF Podcast

Climate change could lead to substantial capital shortfalls for banks

Richard Berner, clinical professor of finance at the Stern School of Business, New York University, joins Natalia Ospina, deputy head of reports, OMFIF. They take a deep dive into the climate stress testing methodology that he developed with Nobel Prize in Economics winner Robert Engle and Hyeyoon Jung, financial economist at the Federal Reserve Bank of New York, which gauges the resilience of financial institutions to climate-related risks.

They discuss in detail how climate change could lead to a substantial increase in systemic risks in the banking sector. Financial institutions could find themselves looking to raise $70bn-$90bn, or between 20% to 30% of their equity to restore their prudential capital ratios as a result of climate change.

Scaling up carbon-offset markets to support global climate action

With COP26 completed and new commitments established, what more can be done to reduce carbon emissions, reach net zero and implement measures to protect natural capital? In this podcast, Emma McGarthy, head of policy analysis at OMFIF’s Sustainable Policy Institute, talks to David McNeil, director and head of climate risk at Fitch Ratings, on the latest developments in carbon-offset markets and the work Fitch is doing in this space. They discuss pricing, tools and policies required to scale the market, how carbon credits fit into capital markets as a financial instrument and the role carbon-offset can play in emerging markets to meet the costs of adaption and mitigation.

Lessons learned building offline CBDC

Daniel Hardman, principal ecosystems engineer at SICPA, joins Philip Middleton, deputy chairman of OMFIF and chair of the Digital Monetary Institute, for a discussion centered around the lessons learned in their work with offline CBDCs. They delve into several topics including the models which facilitate the offline exchange of digital cash, the impact of the pandemic in increasing the need for offline payments and making offline payments secure against digital counterfeiting, fraud and other types of cybersecurity risks.

 

Adopting standards for electronic data interchange between financial institutions

With SWIFT’s plans to fully adopt the common electronic data interchange platform underway, what are the implications of the ISO20022 standard on the wider financial industry? Rishi Tinaikar, business innovation lead in Asia Pacific at SWIFT, joins Jamie Bulgin, relationship director within OMFIF’s Institute for Economic and Monetary Policy, to consider why adoption is important, some of the likely innovation possibilities the standard provides as well as the broader impact on banks and other financial institutions.

 

Common prosperity and state of US-China relations

Following a steady deterioration in China-US relations over four years under President Donald Trump, global attention turned to President Joe Biden and the direction he will take the relationship in. The new administration has been far more hawkish than many experts predicted, maintaining the hard-line policies of the Trump era. While the rhetoric has changed, explicit criticism of Beijing has continued on everything from Hong Kong to the treatment of the Uyghur community in Xinjiang. While Biden concentrates on strengthening US influence in the Indo-Pacific, the impasse continues with competition standing in the way of even clear areas of alignment. This panel discusses the economic and geopolitical outlook for China, as well as the risks that the country faces going into 2022.

Speakers:
Dave Rank, Former Chargé d’Affaires, US Embassy in Beijing
George Magnus, Associate, University of Oxford China Centre
Helen Qiao, Managing Director and Chief Economist for Greater China and Head of Asia Economics Research, Bank of America Merrill Lync

This is taken from a live panel, recorded on 03/11/2021. View the recording here. 

Part 2: Financial services and transitioning to net zero

In partnership with the British Embassy in Madrid and the Spanish Chamber of Commerce in the UK, OMFIF convened two panel discussions on sustainable finance. Speakers focused on how Spain and the UK can work more closely to deliver the COP26 private finance hub strategy, as well as a wider global perspective ahead of COP26 in November.

In this podcast, the focus is on net zero and the future of green finance:

• Alex Michie, Head, Glasgow Financial Alliance for Net Zero
• Marta García de Oteyza, Responsible Banking Senior Manager, Banco Santander
• Ángel Martínez-Aldama, President, INVERCO  
• Hugh Elliott,  British Ambassador to Spain and Andorra,  British Embassy in Madrid
• Simon Thompson, Chief Executive Officer, Chartered Banker Institute

They delve into the role of sustainable finance as a potential key theme of the COP26 summit, the most impactful UK and Spanish policies for mitigating climate-related financial risks, the development of the COP26 private finance hub strategy and the role of public-private partnerships in transitioning to sustainable finance.

The video recording of the meeting can be viewed here.

Listen to part 1 here. 

 

Crypto currencies and digital assets

The continued growth in digital currencies - whether as a means of payment, investment asset or hedge against the dollar - continues to upend the traditional financial landscape. Jesse McWaters, global head of regulatory advocacy at Mastercard, joins Patricia Haas Cleveland, OMFIF's US president, to discuss the key drivers of the growth in cryptocurrencies, stablecoins and CBDCs and implications for the evolving payments system, regulatory challenges, and public-private sector collaboration.

Ahead of the ECB: is a rise in interest rates on the horizon?

As central banks navigate a world of inflation amid the Covid-19 recovery, the European Central Bank is at the heart of the debate. With the Bank of England signalling a rise in interest rates, will the ECB hold steady? Ellie Groves, managing director, Economic and Monetary Policy Institute, OMFIF, is joined by Brigitte Granville, economist and professor of international economics and economic policy in the School of Business and Management at Queen Mary University of London, director of the Centre for Globalisation Research and author of Remembering Inflation (Princeton University Press, 2013). They discuss the new environment central banks find themselves in, the expanding mandates of central banks with the risk of climate change and the political reality the ECB is operating in – especially as we get close to the French election.

Do we need programmable central bank digital currency?

Wolfram Seidemann, chief executive officer of G+D Currency Technology, joins John Orchard, CEO of OMFIF, for a discussion about the need for programmable central bank digital currency. They delve into issues such as the role of Covid-19 in accelerating CBDC development, requirements needed for a CBDC, use cases for programmability as a feature of CBDCs, where should the programmability logic lay and the potential for programmability to incentivise CBDC user adoption and to drive innovation.

Kazakhstan’s economic growth and investment potential

With a focus on green investments, gas infrastructure and economic development, John Orchard, OMFIF’s chief executive officer, talks with Erlan Idrissov, Kazakhstan’s ambassador to the UK, and James Martin, co-chairman of the board of directors at the Astana International Financial Centre, on the impact of Covid-19 on the Kazakhstan economy, it’s road to recovery and investment focus over the medium term. They discuss the need for an ESG focus and how Kazakhstan is aligning with global standards to attract investors.