Are banks still special?

Author: | Published: 10 Apr 2018

Their role was redefined during the financial crisis, and now they face the challenges of digital currencies and fintechs. Are banks still special?

Banks have long played a special role in the financial system. But they are only as special as central banks make them, and, since the crisis, central banks have taken steps to make them less so. In the future, banks might not be special at all. If governments were to introduce central bank digital currencies, these would not only replace cash, they might also displace deposits. This would have significant effects on banks, the financial system and the economy at large – and the effects may not all be positive....