Their role was redefined during the financial
crisis, and now they face the challenges of digital currencies
and fintechs. Are banks still special?
Banks have long played a special role in the financial
system. But they are only as special as central banks make
them, and, since the crisis, central banks have taken steps to
make them less so. In the future, banks might not be special at
all. If governments were to introduce central bank digital
currencies, these would not only replace cash, they might also
displace deposits. This would have significant effects on
banks, the financial system and the economy at large –
and the effects may not all be positive....