CBDC could endanger maturity transformation – Philadelphia Fed paper
Opening central bank balance sheet to consumers could create “deposit monopolist”, research says
A central bank digital currency might endanger the maturity transformation that underpins commercial banking, a paper published by the Federal Reserve Bank of Philadelphia finds.
Central banks risk attracting all consumer deposits because they have a competitive advantage over commercial banks during times of stress and bank runs, Daniel Sanches and co-authors find.
This central bank “monopoly” over deposits would thus hinder commercial banks’ ability to fund long-term investments with short
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