Second, banks’ different business models draw more excess liquidity to certain countries than to others. Third, the general search for “safe haven” assets also plays a role. Digital innovations are simultaneously changing the playing field and the rules of the game in the financial markets. In the past, monetary policy was based on the traditional banking sector.
Today the terms “bank” and “banking business” have become more vague. The success of fintech firms, but also the growing influence of the big tech companies, is creating new conditions. They are establishing new forms of payment, trade and settlement. Fresh business ideas challenge established players with standard business models to transform and innovate.