Sunday, October 29, 2017

IMF and World Bank Pivot Toward the Blockchain. Brendan Cody, Impact Investing Intern, George Washington University

The emergence of blockchain technology and cryptocurrency creates potential threats, but also opportunities for the world’s central banks. We noticed a pivot toward greater discussion of blockchain at the IMF and World Bank meetings we attended in early October as central bankers, financial institutions and policymakers took note of these developments.

Cryptocurrencies do not require an intermediary to verify and oversee transactions, allowing transactions to bypass the current monetary system overseen by central banks using fiat currencies.

In their official capacities as international organizations seeking coordinated and stable monetary policy, the International Monetary Fund and the World Bank recognize the potential of blockchain technology and both have taken significant steps in this fintech space.

Christine Lagarde, managing director of the IMF, suggested the creation of a digital currency based on the special drawing rights, a basket of international reserve currencies. There are details and pragmatic questions to be answered about how the currency would function, but this is certainly a positive start. Special drawing rights are seldom used, but blockchain technology could increase their utility by lowering transaction costs and decreasing settlement time. In April, The World Bank created a lab to evaluate blockchain-based currency and data storage applications.

In interviews with CNBC, both Christine Lagarde and World Bank President Jim Yong Kim were cautiously optimistic about developments in blockchain technology, acknowledging the potential but mindful of the risks embedded in this relatively unproven technology. These risks include new, unanticipated security threats and the potential for manipulation by large actors with nefarious purposes.

It will be interesting to see what the future holds for these technologies from an regulatory and institutional perspective, but blockchain's potential for disintermediation of the IMF and World Bank has put these large financial institutions on notice.

Thursday, October 19, 2017

The IMF, BASEL III and Black Banks

IMF Annual Meetings
Small Is Beautiful – Regulatory
Approaches for Non-Systemic Banks
October 14, 2017

Question about Black banks at a session on: How can a more proportionate approach to regulation of small banks be applied to align more closely with their size and business models?

William Michael Cunningham
Creative Investment Research


David Lipton, First Deputy Managing Director, IMF

Michael Gibson, Director of the Division of Banking Supervision and Regulation, Federal Reserve Board

Wednesday, October 11, 2017

The Next COINTELPRO: Black Lives Matter as a violent threat

According to an official assessment obtained by Foreign Policy Magazine, the US government has declared “black identity extremists” like the "Black Lives Matter" movement a violent threat to the country. This assessment was made by the FBI’s counter-terrorism division.

The finding, which carries with it the authority of a major counterterrorism arm of the United States, authorizes agencies of the Federal Government to use extraordinary means to protect the country from this erroneously declared threat. This might include spying on, rounding up, or forcibly detaining BLM activists and their supporters.

History has shown what this means. COINTELPRO, "a series of covert, and often illegal, projects, starting in 1956 and conducted by the United States Federal Bureau of Investigation (FBI), aimed at surveilling, infiltrating, discrediting, and disrupting American political organizations."

FBI records show that COINTELPRO resources targeted groups and individuals that the FBI deemed subversive, including..activists of the Civil Rights Movement or Black Power movement (e.g., Martin Luther King, Jr. and the Black Panther Party).."

One does not need to go back to 1956 to find a violation of Black first amendment rights by law enforcement organizations: in 2014 and 2015 "undercover officers in the New York police department infiltrated small groups of Black Lives Matter activists and gained access to their text messages.."

Given the fact that the FBI and other police departments have "downplayed the threat posed by white supremacist groups" this new declaration should be viewed with alarm.

We strongly encourage members of the Congressional Black Caucus to hold an emergency town hall conference call on this matter, using all available technologies and with all deliberate speed.