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Getting to grips with blockchain

Getting to grips with blockchain

Banks have suddenly cottoned on to the power of the blockchain technology beneath Bitcoin. Inside their own treasuries and innovation labs, and increasingly in collaboration, banks are testing uses for rebranded distributed ledgers to replace their costly, proprietary systems. Enthusiasts see banks creating a new fabric for payments transfer and financial markets, an internet of money. Doubters sense it’s all hype. Big challenges remain, but markets from private equity and syndicated loans to corporate bonds and derivatives may go on private blockchains within months.

Banks are suddenly obsessed with potential of the distributed ledger in financial markets, but regulators must make sure it is used in ways that remove collusion and wrongdoing.

The sheer volume of legal documents pertaining to new regulation that banks must read and take action on across their businesses is a daunting and ever-growing mass that, if printed and piled up, ‘would stretch for a kilometre into the sky’.

We explain the FSB's total loss-absorbing capacity requirements for global systemically important banks (G-Sibs).

US banks have been notable for their reticence over consumer banking innovation for a number of years, and their silence is growing ever more obvious.

The minimum requirement for own funds and eligible liabilities (MREL) is due to become effective in January but its final determination could still be years away.

In 2013, Russia’s central bank became a mega-regulator, overseeing a slew of credit institutions, from banks, insurance agencies, investment vehicles, micro-finance houses to pawnshops.