The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Macaskill on markets: The coming proxy war with Facebook

The Bank of England and Federal Reserve begin to build the bulwarks against Facebook's cryptocurrency Libra.

Macaskill-Dimon,-Solomon-and-Zuckerberg-780



US president Ronald Reagan joked that the nine most terrifying words in the English language are: “I’m from the government and I’m here to help.”

Bankers often complain about the burdens of regulation, but they will rely heavily on support from government officials as they seek to prevent Facebook’s digital currency Libra from bypassing financial market incumbents.

The early signs for banks are encouraging. 

Randal Quarles, the Federal Reserve governor with chief responsibility for US supervision and chairman of the Financial Stability Board of international regulators, announced after Facebook unveiled its Libra proposal that it will come under close scrutiny. 

Bank of England governor Mark Carney warned that a regulatory framework for payments by new systems such as Libra will be needed before they are allowed to operate and drew a contrast with Facebook’s core social media business, which developed with little initial supervision.

Carney added that the BoE plans consultations about allowing new payment systems to hold interest-bearing accounts at the central bank in the same way as commercial banks, which poses a theoretical threat to incumbents.

The principle that regulators and politicians will examine each step of the development of Libra has nevertheless been established.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree