• Miguel Fernández Ordóñez

    Miguel Fernández Ordóñez was the governor of the Spanish Central Bank and member of the Governing Council of the ECB from 2006 to 2012. Before this position, he was among others, Secretary of State for the Spanish Ministry of Economy and Secretary of State for the Ministry of Finance. He also held positions as Chairman of a Securities firm and board member of a big commercial bank. He was also member of the IMF Board, President of the Competition Court, President of the National Electricity Commission and lecturer at the Universidad Complutense in Madrid.


“Of all the many ways of organizing banking, the worst is the one we have today.”                 (Mervyn King, 2010)

Today I shall not talk about the short-term challenges facing banks, such as the evolution of interest rates or taxes, the economic situation, the legacy of unproductive assets, or the changes in regulatory requirements. I will try to find out whether, within the technology-generated changes, there is one that is “disruptive”, in other words one that can produce a radical change in the banking activity of such importance that, as is happening with other industries, it forces private banks to transform themselves into companies very different from those that exist today.

Neither will I deal today with the effects that “Fintech” can have on banking, because, although they are also “disruptive”, they do not question the current banking system, which allows private banks to create money. This privilege of being able to create money is the source of the current system’s fragility and, as long as it remains unchanged, it will still be necessary to apply exceptional regulatory and budgetary remedies to avoid the disastrous consequences of banking crises.

Download the paper The Future of Banking: SecureMoney and Deregulation of the Financial System for further reading.

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