Péter Kondor (LSE): Strategic Money and Credit Ledgers

Presenter: Markus K. Brunnermeier (Princeton) 

Discussant: Péter Kondor (LSE) 

Zoom webinar link: https://stanford.zoom.us/j/96359613411?pwd=aFR5OExGN1FOUVB1MWErYWdiLzBP…;

Webinar ID: 963 5961 3411 Passcode: 562495 

Strategic Money and Credit Ledgers 

Authors: Markus K. Brunnermeier (Princeton) and Jonathan Payne (Princeton) 

Abstract: This paper studies strategic decision making by a private currency ledger operator, which faces competition from public money and/or other ledgers. A monopoly ledger operator can incentivize contract enforcement across the financial sector by threatening exclusion, but it can also impose markups through its pricing power. Currency competition limits rent extraction, but also makes coordinated contract enforcement more fragile. The emergent market structure bundles the provision of ledger and platform trading technologies. Regulation to ensure platform cooperation on contract enforcement and competition on markup setting is effective so long as agents can easily switch between platforms. 

Bio of speaker: Markus K. Brunnermeier is the Edwards S. Sanford Professor in the economics department at Princeton University and director of Princeton's Bendheim Center for Finance. His research focuses on international financial markets, monetary theory, and macroeconomics with special emphasis on bubbles, liquidity, financial crises and digital money. He established the webinar series as a platform for leading thinkers. Brunnermeier was awarded his PhD by the London School of Economics (LSE) and a Doctor honoris causa from the University of Regensburg. His award winning books include "A Crash Course on Crises", “The Resilient Society”, and "The Euro and the Battle of Ideas." Brunnermeier is president of the American Finance Association, nonresident senior fellow at the Peterson Institute, a research associate at the National Bureau of Economic Research, the Centre for Economic Policy Research, CESifo, ABFER, and a member of the Bellagio Group on the International Economy. He is a Sloan Research Fellow, fellow of the Econometric Society, Guggenheim Fellow, and the recipient of the Bernacer Prize granted for outstanding contributions in the fields of macroeconomics and finance. He is a member of several advisory groups, including to the US Congressional Budget Office, the Bank for International Settlements, Bank of Japan, and the Bundesbank as well as previously to the International Monetary Fund, the Federal Reserve of New York, the European Systemic Risk Board. He has been awarded several best paper prizes and served on the editorial boards of a number of leading economics and finance journals. He has worked to establish the concepts of: liquidity spirals, Financial Dominance, CoVaR as a measure of systemic risk, the Volatility Paradox, Paradox of Prudence, Resilience, European Safe Bonds (ESBies), the redistributive monetary policy, the Reversal Rate, and Digital Currency Areas. 

Bio of discussant: Péter Kondor is a Professor of Finance at the London School of Economics and Political Science and a CEPR Research Fellow. His research focuses on asset pricing with frictions, information and learning and delegated portfolio management. He is currently on the editorial board of the Journal of Financial Economics and was an editorial board member of the Review of Economic Studies and the Journal of Finance. Kondor was awarded his PhD by the London School of Economics (LSE).