KC Fed: Advanced Nations Struggling to Find a CBDC Rationale
In concert with Vice Chair Brainard’s testimony yesterday (see Client Report CBDC13), the Kansas City Fed released a brief assessing the reason advanced economies have so far been considerably more hesitant than emerging ones to craft retail focused CBDCs. By laying out how many advanced economies are at best lukewarm to CBDC, the brief’s review illuminates reasons why the FRB is hesitant without directly addressing the U.S. The post looks at numerous CBDC rationales (e.g., financial inclusion, Payment-system speed) and differentiates them by major nations.
FRB-Cleveland: Post-1994 Bank Restructuring Improved LMI Inclusion
A new study from the Federal Reserve Bank of Cleveland offers perhaps the first literature survey of financial inclusion. It largely summarizes outstanding work, but notes that interstate banking following the Riegle-Neal Act of 1994 correlates with increased bank-branch density correlated in turn with a four percent increase in LMI household financial inclusion. This conclusion is interesting in light of the significant increase following the Act also in bank consolidation in light of continuing concern about “banking deserts” said to be due to M&A (see FSM Report MERGER9).