For a New System of International Payments

Cencini, Alvaro

doi:10.2139/ssrn.1463938

Cited by 4 publications

(3 citation statements)

References 4 publications

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“…The first concerns the lack of a centralized system of payments whereby the ECB would 'vehiculate' or convey each payment between residents of different euro-member countries through the circular emission of a common currency (see Cencini, 2010Cencini, , 2016. As it happens within any national banking system, payments between clients of different banks require the intervention of the central bank acting as monetary and financial intermediary.…”

Section: A Statistical Confirmation: the Case Of Spainmentioning

confidence: 99%

The sovereign debt crisis: The case of Spain

Cencini

2017

Cuadernos de Economía

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The sovereign debt crisis is often evoked as one of the main causes of the economic difficulties faced by net importing countries and as the rationale behind the austerity measures imposed on their residents. Nothing seems more evident than a country whose global, commercial and financial, imports exceed its global exports has to finance its deficit through a foreign loan. This inevitably leads to the formation of an external debt. Yet, things are less straightforward than they might appear, and a rigorous analysis is called for to verify whether any country' sovereign debt is ever justifiable. The paper shows that it is because net global imports are paid twice that net importing countries run up a sovereign debt. The case of Spain is symptomatic and provides statistical confirmation of the pathological increase in the country's external debt.

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Section: A Statistical Confirmation: the Case Of Spainmentioning

confidence: 99%

The sovereign debt crisis: The case of Spain

Cencini

2017

Cuadernos de Economía

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“…Exchange rate stability with regard to cross-border payments would be obtained 'automatically' through the implementation of a mechanism respectful of the flow nature of money. The circular use of the Euro would 'impede its transformation into an object of exchange, and permit the passage from today's regime of erratic exchange rate fluctuations to a system of stable exchange rates' (Cencini, 2010, p. 54).…”

Section: The Use Of the Euro Issued By The Ecb As In-mentioning

confidence: 99%

Can the ECB save the Euro zone?

Cencini¹

2016

Banks and Bank Systems

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The European project of monetary unification is under threat as never before. It is, therefore, high time to point out what went wrong and what should be done to reform the Eurosystem accordingly. This paper shows that Euro zone member countries are de facto still lacking a single currency and a monetary system that would allow for the final payment of cross-border transactions. Starting from the RTGS mechanism adopted by the Eurosystem and from a comparison with the working of domestic payment systems, it describes the changes required to transform the ECB into a bank of central banks capable to guarantee the existence of a true system of intra-European payments, with or without a single European currency (that is, with or without the loss of Euro zone countries’ monetary sovereignty)

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“…It should not come as a surprise, therefore, that the present 'non-system' (Williamson 1977, p. 73) for international payments originates global imbalances, which can then ravage the domestic economies: 'If I had an agreement with my tailor that whatever money I pay him returns to me the very same day as a loan, I would have no objection at all to ordering more suits from him' (Rueff and Hirsch 1965, p. 2). This international monetary disorder, which originates both global imbalances and erratic exchange-rate fluctuations (see Cencini 2010), also has tremendous effects on the domestic economy of 'key-currency' countries. Let us refer to the case of the US Table 2 The duplication of bank deposits denominated in 'key currencies' economy, considering notably the so-called 'subprime' crisis that erupted in 2007 and all its negative consequences that have devastated the domestic and global economy.…”

Section: Money and Payments Within And Across Monetary Spacesmentioning

confidence: 99%

Structural reforms in payment systems to avoid another systemic crisis

Rossi

2015

Review of Keynesian Economics

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This paper shows how a defective architecture for domestic and international payments has made it possible for banks to exploit the endogenous nature of money in a variety of purely speculative financial-market transactions that have led to the eruption of a global systemic crisis. I elaborate on a monetary-structural reform, which should make sure that no bank will any longer be in a position to blur the distinction between money and credit, as this confusion in the banks' books originates various asset bubbles as well as systemically important financial institutions, both of which are major contributors to making the system increasingly fragile as time goes by. This reform of domestic payment systems will not be enough to avoid so-called global imbalances at an international level. I therefore propose, in the spirit of Keynes, a structural reform of the international monetary system, arguing for the emission of a supranational money in settlement of every individual transaction between any two monetary spaces.

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For a New System of International Payments

Cited by 4 publications

References 4 publications

The sovereign debt crisis: The case of Spain

The sovereign debt crisis: The case of Spain

Can the ECB save the Euro zone?

Structural reforms in payment systems to avoid another systemic crisis

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