This book is a timely response to current questions about the transformation of banks and the future of the monetary and financial markets. It is presented as the logbook of a great banker confronted with the storms of the latest economic and financial crises, as well as the pitfalls of banking regulations. As in any diary, the author delivers his reflections on events experienced and expresses his opinion on measures taken, but he also offers the reader a real living treaty on banking economics, which requires careful reading because of the great technicality of certain subjects.
The book offers three levels of reading. It is structured in three sequences, devoted respectively to the post-2008 crisis banking reform (2011-2014), the adaptation of the financial systems (2015-2020), and the new monetary and banking world (2020-2024). It covers ten themes: the State and public debt, markets and their infrastructures, Central Banks, monetary policy, regulatory policy, banks, non-banks, international, macroeconomics, and digitalization. It raises 61 issues in short columns.
The reader is struck by the seriousness of the problems encountered and the creativity of the responses provided by bankers and financial experts, who are too often divided. The latter must manage the new types of risks generated by the disintermediation of banks and the intermediation of markets, the competition of online banks and the development of non-banks (shadow banking), the collateralization of credits and the diversification of financial instruments, the digitalization and securing of transactions – and in particular the multiplication of digital currencies issued by Central banks and private organizations (bitcoin, token, libra, terra-luna, etc.) -, the “greening” of credits, the withdrawal of banking networks, and above all, the political and administrative difficulty of reforming the systems…
The reader will appreciate the relevance of the (always on going) questions asked, the mastery of the (sometimes very technical) subjects covered, the pedagogical qualities (attested by a useful index of acronyms) and the author’s way with words (“collateral: private virtue, collective vice”, “financial reforms: everyone is looking for their cat”, “should banks stay in the basement?”, “the three crises or the parable of the forest fire”, “should cash be abolished?”, “the magic martingale of public debt”, “Central bankers tomorrow: plumbers or watchmakers?”…
The author (X-Mines, PhD Harvard) was one of the Executive Committee members of BNP Paribas and is a professor of economics at Sciences Po Paris. He has published numerous books, one of which, The Zero Interest Rate World, received the Turgot Prize in 2017. clubturgot.com paid tribute to his work in 2024.
Review by J-J. PLUCHART
