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Will video kill the radio star? Digitalisation and the future of banking

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Listed:
  • Beck, Thorsten
  • Cecchetti, Stephen G.
  • Grothe, Magdalena
  • Kemp, Malcolm
  • Pelizzon, Loriana
  • Sánchez Serrano, Antonio

Abstract

This report discusses the impact of digitalization on the structure of the European banking system. The recent wave of financial innovation based on the opportunities digitalisation offers, however, has come mostly from outside the incumbent banking system in the form of new financial service providers, either in competition or cooperation with incumbent banks but with the potential for substantial disruption. After discussing how identified risks may evolve and the emergence of new sources of risks, the report introduces three different scenarios for the future European banking system: (i) incumbent banks continue their dominance; (ii) incumbent banks retrench; and (iii) central bank digital currencies (under certain specifications). It also derives macroprudential policy measures.

Suggested Citation

  • Beck, Thorsten & Cecchetti, Stephen G. & Grothe, Magdalena & Kemp, Malcolm & Pelizzon, Loriana & Sánchez Serrano, Antonio, 2022. "Will video kill the radio star? Digitalisation and the future of banking," Report of the Advisory Scientific Committee 12, European Systemic Risk Board.
    • Handle: RePEc:srk:srkasc:202212
    Note: 1601201
    as

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    File URL: https://www.esrb.europa.eu//pub/pdf/asc/esrb.ascreport202201_digitalisationandthefutureofbanking~83f079b5c7.en.pdf
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    References listed on IDEAS

    as
    1. David Yermack, 2017. "Corporate Governance and Blockchains," Review of Finance, European Finance Association, vol. 21(1), pages 7-31.
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