International Monetary Fund head Christine Lagarde said central banks around the world should consider issuing digital currency.
Speaking in Singapore, Ms Lagarde said this could make digital currency transactions safer.
Non-cash payments have increased over the years, raising challenges for governments and central banks.
Regulators have voiced concerns with digital currencies and called for greater oversight.
"I believe we should consider the possibility to issue digital currency," Ms Lagarde said in a speech at a conference in Singapore. "There may be a role for the state to supply money to the digital economy."
"The advantage is clear. Your payment would be immediate, safe, cheap and potentially semi-anonymous... And central banks would retain a sure footing in payments."
Ms Lagarde said central banks in Canada, China, Sweden and Uruguay were all "seriously considering" digital currency proposals.
A virtual currency issued by a central bank would be a liability of the state - as cash is - not of a private firm.
This would help consumers by making transactions safer and more common, and as a result cheaper.
"The more people you serve, the cheaper and more useful the service," Ms Lagarde said. "Private firms may under-invest in security to the extent they do not measure the full cost to society of a payment failure."
She added that while the case for digital currency "is not universal" it should be investigated "seriously, carefully and creatively".
Although the technology underlying digital assets has been praised for speeding up financial transactions and reducing costs, the anonymity behind cryptocurrency trading has prompted concern among regulators.
Ms Lagarde previously said the anonymity of currencies such as Bitcoin means they are used by criminals and terrorists.
Bank of England Governor Mark Carney has also said cryptocurrencies such as Bitcoin should be regulated to crack down on illegal activities and protect the financial system.
uation after Washingtopn Post Article from yesterday
WP :
Pence: It’s up to China to avoid a cold war
ABOARD AIR FORCE TWO, ABOVE THE SOUTH CHINA SEA — When President Trump meets Chinese President Xi Jinping in Argentina later this month, the escalating tension between the world’s two global powers will face a crucial test. If China wants to avoid an all-out cold war with the United States and its partners, it must fundamentally change its behavior, according to Vice President Pence. The United States, he assured me, won’t back down.
As Pence arrived Tuesday in Singapore to represent the United States at the Association of Southeast Asian Nations (ASEAN) summit, the question on the minds of all the region’s leaders is whether Washington and Beijing are headed into a protracted, long-term economic and strategic confrontation. Pence and Xi will both attend the Asia-Pacific Economic Cooperation (APEC) leaders summit in Papua New Guinea later this week, but they won’t meet. Xi is set to meet Trump in Buenos Aires at the upcoming Group of 20 meeting, which starts on Nov. 30.
Pence told me in an interview that Trump is leaving the door open for a deal with Xi in Argentina, but only if Beijing is willing to make massive changes that the United States is demanding in its economic, military and political activities. The vice president said this is China’s best (if not last) chance to avoid a cold-war scenario with the United States.
“I think much of that will depend on Argentina,” Pence said. “The president’s attitude is, we want to make sure they know where we stand, what we are prepared to do, so they can come to Argentina with concrete proposals that address not just the trade deficit that we face … We’re convinced China knows where we stand.”
In addition to trade, Pence said China must offer concessions on several issues, including but not limited to its rampant intellectual property theft, forced technology transfer, restricted access to Chinese markets, respect for international rules and norms, efforts to limit freedom of navigation in international waters and Chinese Communist Party interference in the politics of Western countries.
If Beijing doesn’t come up with significant and concrete concessions, the United States is prepared to escalate economic, diplomatic and political pressure on China, Pence said. He believes the U.S. economy is strong enough to weather such an escalation while the Chinese economy is less durable.
“We really believe we are in a strong position either way. We are at $250 billion [in tariffs] now; we can more than double that,” Pence said. “I don’t think it’s a matter of promises. We’re looking for results. We’re looking for a change of posture.”
On Tuesday morning, Pence huddled in Tokyo with Japanese Prime Minister Shinzo Abe, who recently returned from his own meeting with Xi. Pence said Xi’s new outreach to Japan is one of many signs that Beijing is finally taking the Trump administration’s demands seriously.
“I leave Japan more convinced than ever that China got the message,” Pence said. “They know what our administration’s position is. They know what the president’s position is.”
Pence’s mission this week in Southeast Asia is to reassure allies and partners that the United States is offering the region a real and competitive alternative to China’s multitrillion-dollar One Belt, One Road initiative. The Trump administration believes Beijing is using predatory lending schemes that undermine the rule of law and good governance in countries that participate.
While in the region, Pence is not reprising the ultra-critical China speech he gave last month at the Hudson Institute, which laid out the new administration approach in stark terms. Rather, he is trying to make the affirmative case that the United States and its partners have a better vision and can offer better long-term security and prosperity for the region.
“We seek an Indo-Pacific where every nation … is free to follow its own path and pursue its own interests, where the seas and skies are open to all engaged in peaceful activity, and where sovereign nations grow stronger together,” Pence said at a Tokyo news conference. “Authoritarianism and aggression have no place in the Indo-Pacific. And I know this vision is shared by the United States and Japan.”
U.S. and Japanese officials negotiated a joint statement laying out several areas of cooperation intended to implement the Trump administration’s “Indo-Pacific strategy,” including coordination on liquefied natural gas projects, civil nuclear energy cooperation and development assistance cooperation that includes Australia. These “deliverables” are small but significant steps toward showing that the United States is not alone in providing a reasonable alternative for Southeast Asian and Pacific nations to China’s offers.
The trip itself is meant to show the United States has no intention of ceding influence or control over the region to Beijing. On the way from Tokyo to Singapore, Pence’s plane crossed the South China Sea only 50 miles or so from the Spratly Islands, where China has erected military facilities on artificial islands in violation of its international commitments.
Pence told me the flight was something of a “freedom of navigation” mission in and of itself. “We will not be intimidated,” he said. “We will not stand down. We will continue to exercise freedom of navigation.”
I asked him what would happen if Beijing doesn’t agree to act in Asia in a way that can avoid a cold war with the United States.
“Then so be it,” Pence said. “We are here to stay.”
The scandal of Goldman’s secret agent
Banks and consultants are tarnished by doing deals for foreign governments they should avoid
Goldman Sachs has faced many crises in its time but none more shocking than the case of Tim Leissner, its former senior partner in south-east Asia. Wall Street is supposed to bring transparency to emerging markets, not to make corruption easier.
Mr Leissner, who has admitted to laundering money and bribery, was corrupted in spectacular fashion. He pleaded guilty to conspiring with Jho Low, a flamboyant deal fixer, to gain for Goldman a lead role in $6.5bn of bond financing for 1MDB, a Malaysian sovereign wealth fund. He also helped to channel $2.7bn into bribes, including $4m of jewellery for an official’s wife. Mr Low maintains his innocence.
Concealing facts from Goldman’s compliance and legal staff to prevent them from blocking deals was “very much in line with its culture”, he claimed in court. If that is true, Goldman has lost its honour. Even if false, it says little for the bank’s vaunted “federation” — its finance, risk management and legal groups — that he fooled them so easily.
There is a broader lesson from the 1MDB affair. Banks and professional services firms have expanded around the world in the past three decades, offering professionalism and probity to economies as they have liberalised and joined global markets. Advisers have also made a lot of money — Goldman raked in $600m for its work on three 1MDB bond issues.
But Goldman’s fiasco in Malaysia and McKinsey’s 2016 humiliation over its dealings with a politically connected South African firm show how they miscalculated the risks of dealing with corrupt governments. Instead of raising the ethical bar, western providers have allowed their names to be tarnished by scrambling to strike deals with people they should have avoided at all costs.
Selling advice should not involve selling your soul, yet that was the fate of Mr Leissner in Malaysia. Two other Goldman executives have been drawn into the affair, with one accused of involvement in bribes that were laundered into New York real estate, paintings and even financing for the Wolf of Wall Street film. You could not make it up.
This comes at a sensitive time for Goldman, as its advisory and investment banking side has risen to power under new chief executive David Solomon. That is a shift from the dominance of its bond and derivatives division under Lloyd Blankfein, who will soon step down as chairman.
Bond trading reached a climax shortly before the 2008 crisis, in which the perils of mortgage-backed securities emerged with a vengeance. The 1MDB affair suggests that today’s global boom in mergers and acquisitions and financing advice may also end with a reputational bust. Opaque clients can be just as damaging as opaque derivatives.
Advisers constantly hustle for new business, and Mr Leissner was a relentless seller of Goldman’s expertise, rising to be south-east Asia chairman. In emerging markets, that often involves intermediaries who have — or claim — the inside track to businesses and high officials of governments.
Fixers want to be paid, and sometimes to distribute bribes to those who sign the deals. Oil companies, industrial conglomerates and multinationals used to look the other way and go along with local customs to gain business. That is now trickier thanks to tougher enforcement of anti-bribery laws including the US Foreign Corrupt Practices Act.
Goldman has two safeguards against lawbreaking, both of which failed at 1MDB. One is its structure of accounting and oversight, a counterbalance to the eagerness of traders and bankers to attract revenues that will boost their year-end bonuses. The bank has always taken pride in having strong and independent controls.
In a limited sense, these worked — its “business intelligence group” told Mr Leissner not to deal with Mr Low because it could not account for the latter’s wealth. But the banker found it all too easy to ignore their instructions, meeting Mr Low secretly and using shell companies and personal bank accounts to furnish bribes.
Goldman’s other safeguard is its culture, in which it takes equal pride. That was codified by John Whitehead, former joint senior partner, in 12 “business principles”. The second of these notes that lost reputation is “the most difficult to restore” and promises: “We are dedicated to complying fully with the letter and spirit of the laws, rules and ethical principles that govern us.”
Not so Mr Leissner, who was dedicated to doing whatever it took to be a winner. An unscrupulous partner is a big enough problem in London, New York and Hong Kong, where the bank’s compliance group is based; when he or she works far from oversight, the damage is harder to contain.
Welcome to emerging markets, where an individual on the edge of the bank’s network embodies its reputation, and may be asked to do dubious things to gain business. It is a version of the problem facing every intelligence agency — a secret agent turns double agent.
There have been enough blow-ups to give every consultancy and bank pause. Too many set off down the road to Kuala Lumpur, Johannesburg and elsewhere thinking of what they could offer, not how they might be affected. Mr Leissner first fitted in at Goldman and then with 1MDB.
Germany’s economy contracts in Q3 for first time in over 3 years
Germany, Europe’s largest economy, contracted for the first time in more than three years, shrinking by 0.2 per cent between the second and third quarter on the back of a fall in exports.
Growth in the eurozone’s economic powerhouse was expected to be weak on the back of delays in German automakers meeting the new emissions standards. The region’s economy is also being hit by weaker exports to China. The contraction was slightly sharper than expected and is the first since early 2015.
“The slight quarter-on-quarter decline in the gross domestic product was mainly due to the development of foreign trade. According to provisional calculations, exports were down while imports were up in the third quarter of 2018 compared with the second quarter of the year,” De Statis, the federal statistics office, said.
“As regards domestic demand, there were mixed signals. While gross fixed capital formation both in machinery and equipment and in construction was higher than in the previous quarter, final consumption expenditure of households declined. Government final consumption expenditure was slightly higher than in the previous quarter.”
The publication of the figure by De Statis follows disappointing figures for regional growth. The eurozone’s economy expanded by just 0.2 per cent in the second quarter — the smallest expansion in more than four years. Italy’s economy did not grow at all.