Pacific Exchanges

Latest Episodes:

Fintech & Racial Equity: Featuring Our Recent Collaboration on the Community Development Innovation Review Oct 11, 2021

We’re excited to share a special episode in partnership with our colleagues in the San Francisco Fed’s Community Development group. Our teams recently collaborated on a special issue of the Community Development Innovation Review in partnership with the Aspen Institute’s Financial Security program, which examined the potential ways financial technology can promote racial equity in the financial system. Today’s episode is a corollary to our recently concluded Financial Inclusion & Beyond series where we explored what we can learn from efforts around the world to improve financial inclusion and wellbeing.

The event included a fireside chat with San Francisco Fed President Mary Daly and Ida Rademacher, Executive Director of the Aspen Institute’s Financial Security Program, and a panel discussion with several journal contributors moderated by Rocio Sanchez-Moyano, a senior researcher in the Community Development group.

Some take-aways from the live event include:

The current financial system does not serve everyone equally. The inability to access and use financial services impedes people’s full participation in the economy. Communities of color and low-income communities are disproportionately left out of the financial system. Fintech provides an opportunity to reach those excluded by the financial system.
Fintech shows promise in furthering financial inclusion. Improvements in transaction processing, digital identity, and use of real-time and alternative data for risk assessment could offer significant improvements to individuals currently left out of the financial system.
Fintech solutions designed based on a nuanced understanding of lived experiences of those they serve have greater impact. Many consumers come up with work-arounds or adaptations to work with existing services that do not meet their needs. Efforts to increase diversity in the fintech ecosystem (from founders to staff, venture capital, and regulators) and greater prioritization of learning from the experiences and challenges that users from low-income communities and communities of color face can enable the creation of higher impact fintech solutions.

Aspen Institute Financial Security Program

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Financial Inclusion & Beyond Series Wrap-up Aug 02, 2021

In the final episode of Financial Inclusion & Beyond, your series hosts take a look back at key themes and takeaways from our conversations.

Some of the key takeaways we review include:

The events of the pandemic left us all humbler at the scope of the challenge we face here in the United States to deliver full financial access to all citizens and promote their financial health.
Financial inclusion often conveys the notion of basic access, but true inclusion is about enabling individuals lives and letting them pursue their dreams.
Experts from a diverse range of disciplines like impact investing, behavioral economics, and community development are focused on designing new financial products and services to meet the needs of low income populations historically treated as second class citizens in the financial system.
Regulators need to grapple with how to promote positive change through their engagement with innovative firms. A narrow focus on simply negating bad outcomes has not been sufficient to create real financial inclusion and racial equity, and a shift in mindset is necessary.
The San Francisco Fed’s Framework for Change makes a persuasive case for the economic benefits of a more inclusive financial system. We are at a critical moment to reflect and take action, and both public and private stakeholders have a lot of work ahead of them to promote meaningful change.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Live Virtual Event: Creating an “On-Ramp” For Financial Inclusion Jul 07, 2021

Our Pacific Exchanges team recently hosted a special Financial Inclusion and Beyond live virtual event that explored lessons from around the world in the use of technology and public policy to build more inclusive financial systems and drive financial health.

The event was moderated by Sean Creehan, the team's lead for financial health and inclusion, and brought together professionals from different corners of the financial inclusion and health spaces, including Greta Bull, the president and chief executive officer of the Consultative Group to Assist the Poor (CGAP); José Quiñonez, the founding chief executive officer of Mission Asset Fund (MAF); Arjuna Costa, a managing partner at Flourish Ventures; and Ting Jiang, a behavioral economist.

We’re excited to share the live event in full as a special episode of Financial Inclusion and Beyond. Regular listeners of the podcast will recognize these voices from their episodes throughout the season; the live event allowed them to discuss how they were managing the challenges to inclusion posed by the COVID-19 pandemic.

Some take-aways from the live event include:

The COVID-19 pandemic has dramatically affected efforts to improve financial inclusion and health. Organizations like CGAP, a World Bank Group affiliate, and MAF, which traditionally focus on the longer-term issues of inclusion, had to re-focus efforts almost overnight to deal with issues related to public health.
Those countries which had invested in digital financial system infrastructure could respond with stimulus relief quicker than those which relied on traditional models. Ting Jiang zeroed in the pandemic's effects at the individual level.
At the individual level, it is important to adapt behaviors and develop products and technologies that withstand moments of stress.

The poor shouldn't be forced to be secondary or third-order users of financial products but should have access to products designed for their lifestyles at an affordable cost. Fintech should be celebrated when it is also in service of the poor, not simply because it is a shiny new toy.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Grovetta Gardineer Reflects upon Inclusion Challenges in the United States May 13, 2021

In episode nine of Financial Inclusion & Beyond, we spoke with Grovetta Gardineer, the Senior Deputy Comptroller for Bank Supervision Policy at the Office of the Comptroller of the Currency. As a veteran bank regulator with more than three decades of experience in banking supervision, policy and regulation, Grovetta is a well-known leader and expert in the space of compliance and community programs.

We sat down to discuss lessons learned from the COVID crisis, financial inclusion challenges here in the United States, as well as the role public policy and regulation should play. Key takeaways from the discussion include:

The US financial system has failed to provide equitable access for people of color. The barriers to financial access have prevented excluded populations, African Americans in particular, to achieve a healthy financial life and to build generational wealth.
To tackle inclusion challenges, the OCC and other regulatory agencies have taken concrete steps to engage in a collaborative effort, Project REACh. The project focuses on three broad areas: bringing so-called “credit invisible” populations back into an inclusive financial system, increasing affordable housing, and recognizing the crucial role that minority depository institutions play in the United States.
This effort must leverage the strength of various stakeholders, including all types of financial institutions, businesses, and community groups. For example, fintech firms’ approach to alternative credit scoring can provide opportunities as they partner with innovative banks.
While there are benefits offered from collecting financial data, strict privacy guidelines and expectations need to be established to ensure consumer confidence and trust of the financial system.

Join Our Live Event May 18!

We will be hosting a live virtual event to mark the release of Financial inclusion & Beyond, the fourth season of our Pacific Exchanges podcast with a panel of four experts who appear in the series. We’ll discuss their lessons learned from the COVID-19 crisis and how the pandemic has underscored the importance of building inclusive financial systems that enable everyone’s financial health and promote equal opportunities. Details and registration link here.

Related Content

Project REACh

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Tracy Basinger on Shifting the Regulator Mindset to Encourage Inclusive Innovation May 10, 2021

In episode eight of Financial Inclusion & Beyond, we spoke with Tracy Basinger, the recently retired head of supervision here at the San Francisco Fed. Tracy has spent her career focused on the impact of financial services on everyday citizens. From leading consumer protection here at the San Francisco Fed to overseeing a nationwide team considering policy solutions for small businesses suffering during the COVID-19 crisis, Tracy has thought long and hard about the role of public policy, regulation, and technology in promoting a more inclusive financial system.

We get into examples of financial innovations that are promoting inclusion and the challenges for regulators and policymakers who want to minimize risks to consumers and the broader financial system while not getting in the way of positive change. And we talk about how to shift from a historical mindset that focused on preventing exclusion to one that thinks about ways to promote inclusion and broader notions of financial health and wellbeing.

Key takeaways from the discussion include:

The challenges of 2020 made it abundantly clear that our financial system is not fair and forced financial regulators to re-consider rules and policies to ask how they promote or detract from efforts to build a more inclusive financial system.
Historically regulators have been considered successful if they prevent bad things from happening. Shifting to an approach to not only protect consumers, but help them meaningfully participate in the financial system, requires a different mindset.
Regulating modern financial technology is not simple. The rapid adoption and scaling of new innovations increase their potential both to create benefit and cause harm. To the extent technology is clearly providing a benefit, even an only incremental one, without causing obvious harm, regulators should be enabling it.
Providing clarity around rules and regulations to firms is crucial to enable innovation that drives inclusion and financial health. Regulators and supervisors should be engaged from the very beginning to understand the role of new technology, provide guidance when necessary, and avoid reacting after the fact once a problem has surfaced.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Matt Homer on the Importance of Getting Digital Identity Right May 06, 2021

In episode seven of Financial Inclusion & Beyond, we spoke with Matt Homer, Deputy Commissioner of the Research and Innovation division of the New York State Department of Financial Services. Matt is an expert on the use of data and technology for social good. He has previously held positions in the U.S. government and financial technology sectors where he has focused on issues like the role of digital identity in promoting financial inclusion and wellbeing.

We get into the benefits of inclusive technology, but also the potential for digitization to exclude some vulnerable populations, and the unexpected challenges policymakers and firms face in delivering new financial services to people that previously lacked access We also discuss the broader trade-offs between inclusion, privacy, and other emerging data rights.

Key takeaways from the discussion include:

People that aren’t a part of the formal financial system don’t dream of things like getting access to a bank account—a traditional indicator of financial inclusion in the past. They want tools to access the digital economy, whether to operate a business or save for the future.
Universal digital identities that enable people to verify themselves with financial service providers are critical infrastructure for any efforts to include more people in the financial system and broaden their ability to transact in the digital economy.
Policymakers and private companies designing digital identity and other enabling infrastructure must be careful to provide multiple pathways for people to gain access. Matt provides the cautionary example of a brick maker in India whose fingerprints were so worn down that he needed his son to help him provide biometric verification for financial transactions.
Protections for customer data rights, from privacy to ownership, are also crucial in promoting inclusive digital financial systems. Matt argues that in countries like the United States, we need a new trust framework to govern data use in the emerging digital economy, helping people better understand and control the use of their data.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Chris Calabia on the Role of Public Policy and Regulation in Improving Access to Finance May 03, 2021

In episode six of Financial Inclusion & Beyond, we spoke with Chris Calabia, the Senior Advisor for Supervisory and Regulatory Policy, Financial Services for the Poor at the Bill & Melinda Gates Foundation. Chris leads the Foundation’s global efforts to promote a regulatory framework that enables digital financial innovation. Previously he was a Senior Vice President and Banking Supervisor at the Federal Reserve Bank of New York.

We sat down to discuss how to drive financial health for the world's poor by improving access to essential financial services through better public policy and regulation. Chris also shared his insights from the Gates Foundation’s efforts to help promote access to financial services among the unbanked, poor and women, especially in lower and middle income countries around the world. Key takeaways from the discussion include:

There has been focus among policymakers, regulators, central banks, and others, to try to improve access to a financial services account in the past 10-15 years. Despite visible progress, there are still 1.7 billion people globally left without access.
Evidence suggests that access to financial services can improve economic opportunity for the poor and help them build resiliency against unexpected shocks. Regulation should ensure that providers are able to serve the poor, and welcome new providers such as mobile network operators, fintech companies, and social media platforms into financial services.
Gates Foundation research found that countries with functioning digital financial services were far better able to deliver pandemic-related relief to their citizens.
One example of digital solutions helping improve efficiency and access is India, where the government has started to digitalize social welfare benefits. Elsewhere, the Gates Foundation has sponsored experiments to encourage digitalizing payroll in Bangladesh and other developing economies.
Digital infrastructure, such as digital identification systems, can facilitate various banking functions such as e-KYC and remote onboarding of customers by financial institutions. Other segments of the economy including healthcare providers or the education industry could also benefit from digital identification which will make a huge difference in the lives of the poor.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Ting Jiang on How Better Financial Products Can Conquer Our Inner Homer Simpson Apr 29, 2021

In episode five of Financial Inclusion & Beyond, we spoke with Ting Jiang, a behavioral economist who researches and designs products for behavioral change. At the time of this recording, which took place prior to the pandemic, Ting was associated with Duke University's Center for Advanced Hindsight.

We sat down to discuss the way behavioral scientists and product designers can work together to build better financial products that help people take action to improve their financial health. Key takeaways from the discussion include:

Identifying the source of unhealthy financial behavior is a critical step for product designers or policy makers that wish to promote health. While financial literacy is often emphasized as a tool to help low-income populations improve their wellbeing, most poor people understand very well how to manage their money, but there may be other barriers that get in the way.
Behavioral science-informed products can help people remember and act upon their good intentions (e.g. to save money or buy insurance) when the complexities and stresses of daily life might otherwise interfere. Technological and human interventions can help bridge the intention-behavior gap. These designs can appear simple but are effective in behavioral change.
New technology can also help people better imagine their future selves and the potential unexpected shocks of life, suggesting actions to take right now to build resilience for tough times. The more concrete and tangible the future opportunities or stress scenarios feel to an individual, the more likely they are to take action.
Improving the financial wellbeing of a subset of a population can lead to a win-win situation for the individual, their communities, and the financial system. For example, a financial firm helping urban migrant workers in China helps their communities and networks in rural areas, and in turn grows their potential client base.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

José Quiñonez on Seeing the Credit invisible Apr 26, 2021

In episode four of our series Financial Inclusion & Beyond, we spoke with José Quiñonez, the founding chief executive officer of Mission Asset Fund (MAF) and a visiting professor at UC Berkeley, Department of City and Regional Planning. MAF uses innovative national models for integrating financially excluded, low-income communities into the mainstream.

We sat down to discuss how the formal financial system leaves credit invisible (individuals without a credit background) behind. José discussed how MAF is helping those that have typically been left out get integrated into the formal financial system. MAF is drawing on the rich tradition of lending circles to help the low-income and immigrant communities develop a credit history and join the financial system. Key takeaways from the discussion include:

José draws on his experience and insights from working with the local San Francisco immigrant community and shares his view on how to improve financial inclusion and financial health.
Low-income individuals traditionally are secondary users of financial products. Banks and fintechs can ‘meet people where they are,’ by building products to address the primary concerns of the low-income community.
The growing awareness of financial inclusion and financial health reflects a broader understanding that there are more systemic issues at play that keep many low-income individuals credit invisible.
Having a bank account is only the first step towards financial actualization. For poor people to manage complex financial lives, financial services providers, regulators and non-governmental organizations all need to come up with innovative solutions tailored to specific needs of underserved users.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Arjuna Costa on Designing Financial Products for the Unincluded Apr 22, 2021

In episode three of Financial Inclusion & Beyond, we spoke with Arjuna Costa, managing partner of Flourish Ventures, a leading social impact fund focused on financial health. Arjuna invests in entrepreneurs around the world to catalyze innovations that help people achieve financial health.

We sat down to discuss the way entrepreneurs are harnessing the power of behavioral economics and customer-centric design to meet the everyday financial challenges of low income populations. Key takeaways from the discussion include:

For too long, financial systems have thought in terms of standardized products that do not always meet the needs of customers or enable their life goals.
Challenges common in emerging economies often force individuals to become micro-entrepreneurs out of necessity, spurring demand for new financial solutions. This has led to many innovations that are now coming back to developed countries like the United States.
Partnerships between incumbent banks and fintech start-ups can help spread inclusive innovations throughout the financial system, emphasizing the need for banks and regulators to consider how to enable more collaboration.
While financial product innovation can do a lot of good, inclusive economic growth and robust social safety nets are essential to provide the steady income streams that support financial health and resilience in good times and bad.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Greta Bull Puts Financial Inclusion Into Context Apr 19, 2021

In episode two of our series Financial Inclusion & Beyond, we spoke with Greta Bull, the chief executive officer of CGAP (the Consultative Group to Assist the Poor) and a director at the World Bank. Greta is an expert in development finance, primarily focused on small and medium enterprise finance, microfinance, and digital financial services.

We sat down to discuss the history of financial inclusion efforts and the evolution of the financial inclusion movement, the micro and macro effects of inclusion, and lessons learned from various efforts around the globe. Key takeaways from the discussion include:

While global inclusion efforts have taken different paths, they all seem to be converging at the ‘platformization’ of financials services. The modern financial inclusion movement evolved from microfinance in the 1970s and 80s in countries like Bangladesh and reached scale with the creation of digital credit by the mobile network operator (MNO) M-Pesa in Kenya in 2008.
Today, fintechs and banks have been competing across a disaggregated landscape of financial services and are moving to new platforms that offer a range of competing services to the public.
Financial inclusion has traditionally meant the inclusion in formal financial systems of poor people in emerging markets. Effectively done, it provides access to financial services to people who previously didn't have them; establishes a viable and reliable alternative to working entirely with cash; and adds value to people's lives.
Financial inclusion can significantly improve individuals lives. Efforts over the past decade have been effective in bringing 1.2 billion individuals into the formal financial system, but 1.7 billion remain excluded. There is still work to do, both in expanding and deepening inclusion and harnessing these efforts to expand global growth.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Mary Daly on Why the Fed Cares about Financial Inclusion Apr 15, 2021

We’re excited to launch our latest season, Financial Inclusion & Beyond, an exploration of what we can learn from efforts around the world to improve financial inclusion, health, and wellbeing. This is a topic we’ve explored in previous episodes on fintech, and we're eager to ground global insights in the context of our modern challenges amid the COVID 19 crisis and renewed efforts to promote racial equity in the US financial system.

We begin the series with a conversation with our very own San Francisco Fed president Mary Daly. We get into why the Fed cares about financial health and inclusion, how we're engaging and learning from a community of subject matter experts and the general public, and the significant work ahead of us. Key takeaways from the discussion include:

True economic and financial inclusion means everyone has access to the tools that make their lives easier—the ability to meet their daily needs and accumulate wealth for themselves and their families.
From the perspective of the broader economy, we all do better when everyone is included and participating. For policy makers, financial exclusion undermines the resiliency of the economy and hinders growth.
The COVID-19 crisis has magnified the challenges for those citizens that are not fully included in the financial system.
Regulators have historically relied on rules-based approaches to prevent exclusionary behavior, practices like discriminatory “red lining” in mortgage lending that prevented African Americans from buying homes in the 20th. Negating the negative is not enough, however, and regulators need to broaden their mindset to think about how to promote positive change that delivers racial equity in the financial system, drives inclusion, and enables economic life for everyone.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Financial Inclusion & Beyond Coming April 15th! Apr 08, 2021

We’re excited to share a sneak preview of our upcoming series, Financial Inclusion & Beyond, where we’ll be exploring lessons from around the world on how a combination of public policy and technology can create a more inclusive financial system and promote financial health and wellbeing for everyone. We started recording this before the pandemic, and it’s taken us a little longer to get this to you as we record from home, but the events of the past year have only reinforced to us that this a crucially important topic. Stay tuned for the release of the entire series starting April 15.

Season 3 - Rethinking Asia: Asia’s Latest Trade War: Japan vs. South Korea Sep 09, 2019

In this episode of our series Rethinking Asia, we spoke with Chad Bown, Reginald Jones Senior Fellow at the Peterson Institute for International Economics. Chad is an expert on trade, having worked on the issue at the World Bank, the White House Council of Economic Advisors, and the World Trade Organization.

We sat down to discuss the recent trade disagreement between South Korea and Japan. While, rooted in the countries’ deep historical, political, and social tensions dating back to the early 20th century, the attitudes and tactics adopted in the dispute reflect broader global sentiments surrounding trade. Key takeaways from the discussion include:

A new front in global trade wars has opened, with South Korea squaring off against Japan. Specifically, the Japanese government put export restrictions on various exports to South Korea and, most recently in early August, removed South Korea from its so called ‘white list’ of countries that enjoy special trade terms with Japan. The move requires Japanese companies to follow a bureaucratic process when exporting to Korea, disrupting supply chains for Korean microchip and display manufacturers that rely heavily on Japanese inputs.
Today’s tensions date to the Second World War, when Korea was a Japanese colony and Japanese companies used forced Korean labor. In 1965, the two countries signed a treaty to normalize the relationship under which Japan paid restitution to South Korea. Recently, however the South Korean Supreme Court ruled that the treaty only applied at a country level and that individuals could bring cases against Japanese companies. Japanese export restrictions are seen as retaliation for the decision.
The deterioration of the trade relationship between Japan and South Korea reflects current attitudes and trends in trade by which countries are increasingly using trade as a lever to resolve political and social disputes once mediated through diplomatic channels.
This dispute reveals that a focus on bilateral disputes may make it harder for countries to form regional or global trade agreements. Prior to the dispute, according to Bown, South Korea was interested in acceding to the Japan-led CP-TPP (Comprehensive and Progressive Agreement on Trans-Pacific Partnership) trade agreement among 11 countries. It is unlikely to follow through in light of current tensions.
It is hard to say whether the current attitudes toward trade will upend the trend toward globalization established in the aftermath of the World War II. Recent results are a mixed bag: while high profile cases of anti-trade rhetoric and behavior have garnered the most attention, other countries continue to sign free trade agreements.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: The State Strikes Back: The Diminishing Role of China’s Private Sector Jul 12, 2019

In this episode of our series Rethinking Asia, we sat down with Nick Lardy, senior fellow at the Peterson Institute for International Economics. Nick is one of the world's most prominent analysts of China's economic development and the role of its private sector in generating growth.

We sat down to discuss Nick’s new book, The State Strikes Back: The End of Economic Reform in China? Nick walked us through some troubling statistics about the Chinese private sector’s diminishing role as measured from a number of data sources and qualitative indicators of slowing economic reform. Key takeaways from the discussion include:

The role of the private sector has been significantly diminished over the last decade as indicated by a wide range of data related to access to credit and share of investment, and sector-level growth.
China’s state sector has undergone a massive amount of consolidation, with the number of state-owned enterprises (SOEs) declining by roughly 50%, while at the same time state-owned assets grew five-fold. Despite this consolidation—or perhaps because of the implied reduction in competition it brings—the efficiency of SOEs continues to lag that of private companies by a wide margin.
While Chinese President Xi Jinping has recently indicated the banking sector should direct more funds to the private sector, it remains to be seen whether this state-oriented growth pattern will reverse any time soon.
Should China continue down this path of diminishing support for private sector activity, the implications for long-term growth, employment, and innovation could be substantial. On the other hand, a future downturn in the Chinese economy could make Chinese leadership more receptive to reform-minded economists that argue for better policy support for the private sector.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Tracking Cross-border Capital Flows in Asia May 29, 2019

In this episode of our series Rethinking Asia, we spoke with Brad Setser, a Senior Fellow for International Economics at the Council on Foreign Relations. Brad also served as the deputy assistant secretary for international economic analysis in the U.S. Treasury and was previously the director for international economics, serving jointly on the staff of the National Economic Council and the National Security Council.

Brad walked us through the evolution and recent trends in cross-border capital flows in Asia. In the wake of the Global Financial Crisis, capital flows were primarily driven by current account surplus countries in Asia, whose governments were investing money abroad to offset appreciatory pressures on their exchange rates. In recent years, however, divergent global interest rates, economic developments, and a search for yield have spawned a complex web of flows across the Pacific. Key takeaways from the discussion with Brad include:

Throughout the post-crisis period, Asia has been a net exporter of capital. The bulk of financial outflows arose through a buildup in foreign exchange reserves among Asia’s current account surplus economies, though movement out of Japan was also driven by private investors seeking higher yield in a zero-interest rate environment.
Immediately after the crisis, China experienced significant capital inflows. This reflected China’s gradual liberalization of its financial account. Comparably higher interest rates in China led to a growing carry trade, but these inflows reversed sharply in 2015 as the economic outlook deteriorated. In recent years, however, flows have stabilized as China restricted outflows and entered a modest economic recovery.
Capital inflows into emerging Asia have generally followed global investors’ interests in emerging market exposure more broadly. While bank flows were a major component of pre-crisis inflows to the region, regulations have changed to limit banks’ short-term and foreign currency exposure compared to the pre-crisis period (though China is a notable exception). Portfolio flows into the region have taken on a greater role post-crisis.
Across Asia, financial institutions increased purchases of offshore assets in a search for yield as the Fed began rate normalization. The biggest shift in trend over the past five years has been the rise of private capital flows, assuming the dominant role of official flows immediately post-crisis.
The ongoing trade dispute has had a relatively minimal impact on regional capital flows, particularly when compared to the tumultuous effect of China’s exchange rate adjustment in 2015. U.S. tariffs have put downward pressure on the yuan, which in turn put regional currencies under pressure. Rising production costs in China have raised the appeal of neighboring economies, and could lead to rising foreign direct investment in other Southeast Asian nations.
Funding mismatches among the Asian financial institutions is a growing vulnerability. In particular, growing dollar balance sheets in Asia have become an important source of funding for the U.S. economy and recall the experience of European banks pre-crisis. This risk is mitigated somewhat by large reserves in surplus countries and international swap lines, but the systemic implications of the global network of funding demand greater attention.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: The Slow Introduction of Open Banking and APIs in Japan Apr 25, 2019

In this episode, we continued our ongoing series on fintech in Asia with Toshio Taki, the co-founder of Money Forward, a Japanese fintech firm that provides financial management tools for individuals and small businesses. In addition to his role at Money Forward, Toshio also serves as a director of the Japan Association for Financial APIs, promoting the use of open APIs (application programming interface) in Japan.

Toshio talked us through the open banking and API landscape in Japan, highlighting where recent changes in regulation are encouraging further development, and comparing Japan to global peers in this area. Through his work both at Money Forward and with the Association, Toshio is pushing for greater adoption and integration of financial technology services among Japanese clients, and looking in particular to help draw Japan’s economy away from its heavily cash-reliant systems.

Roughly 80 percent of all consumption in Japan is cash-based, placing Japan as a distinct outlier relative to other developed economies. One of the key factors for Japan’s high dependence on cash is the lack of a dominant electronic payment network that is universally accepted in Japan. Compared to China’s Alipay and WeChat Pay, for example, Japanese providers are fragmented and lack merchant integration.
Japan’s Banking Act was amended in June 2018 to promote open banking. However, the regulation lacks clarity on data portability, and implementation of open banking components among Japanese companies remains voluntary. Nonetheless, roughly 130 chartered banks in Japan among the largest 140 have plans to open up APIs by mid-2020.
In its early stages, there are already around 20 Japanese companies using open APIs to provide account information services. Personal finance and corporate accounting services are expected to be significant beneficiaries of open API. Other opportunity sectors will likely include peer-to-peer payment platforms and the development of personal electronic money accounts.
Standardizing bank practices and data formatting across different countries remains a challenge. In part, this reflects the local nature of API development and lack of cross-border services driving international collaboration. This multiplicity is evident even in Japan by itself, where a handful of system vendors have created multiple standards around API infrastructure. Rather than rushing to standardize, however, now may be the optimal time to let early movers experiment and learn what works well and what doesn’t.
Fintech development in Japan is happening quite differently from the way it is evolving in the United States. The U.S. model is based on small disruptors creating a very successful user experience and using this base to alter specific banking functions. In Japan, by contrast, fintech development is occurring in partnership with the larger, more traditional providers. In part, this reflects the difference in Japan’s credit landscape, where households are generally happy with current banking services and SMEs have not faced credit constraints the same way U.S. businesses have post-crisis.
Looking forward, financial services and the banking sector writ large are expected to face major upheavals. For Japanese banks, the transition away from cash will transform the way they attract customers, shifting the major attraction of local banks from their ATM proximity to how exciting their apps are and their exclusive product offers. In addition, a new credit cycle in Japan could usher in novel credit channels – similar to the way peer-to-peer lending was catapulted forward in the U.S. post-crisis to fill the gap left by traditional credit providers.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: The U.S.-China Trade Dispute Mar 25, 2019

In this episode, we continue our ongoing Rethinking Asia series with Louis Kuijs, the head of Asia Economics at Oxford Economics. His background includes a particular focus on China, reflecting experience in both the public and private sectors covering banking, macroeconomic, and policy issues in the world’s second largest economy.

We spoke with Louis about the ongoing trade tiff between the United States and China. He shared his thoughts on the regional economic and structural effects of evolving international trade patterns, China’s path to further integrating into the global financial system, and consequences for the broader U.S.-China relationship from the trade dispute fallout.

The mood in the U.S.-China trade talks has seen some improvements as progress is being made. More broadly, the ongoing trade dispute reflects the change in American mentality; in the U.S., the narrative on U.S.-China relations has shifted from cooperation to rivalry.
When measuring the near-term effects of the U.S.-China trade tiff, the impact on business confidence is often overlooked. Indeed, the effect of uncertainty could be larger than the direct impact of the tariffs via weaker exports and higher prices. Over the medium term, however, the trade dispute may have much larger effects via a global reconfiguration of supply chains and growing underlying tension between the U.S. and China which is centered on technology.
While China serves as a well-known hub in the global supply chain, Chinese demand and China’s rapidly growing role as a destination for imports have been major drivers for regional trade. Tariffs will ultimately result in a net loss for regional trade partners by reducing Chinese growth and demand. Gains in trade for partner countries associated with receiving relocated production facilities, for example, will likely be overwhelmed by slower growth.
Despite the U.S.-China dispute, appetite for free trade agreements in Asia remains strong. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect on January 1, includes greater flexibility in several provisions relative to the TPP version. Another regional agreement, RCEP, can potentially add an additional layer or extension of trade liberalization that compliments CPTPP.
Over the longer term, China’s stated liberalization objectives have implicit contradictions. On the one hand, policymakers plan to continue taking steps to open up the country, further integrating China into the global economy and financial system. On the other hand, policymakers have underscored their commitment to maintain China’s current model, whereby the Party remains at the heart of economic decisions and state-owned enterprises have a central role.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Fits and Starts For Japanese Corporate Governance Reform Feb 28, 2019

In this episode of our series Rethinking Asia, we spoke with Ken Hokugo, head of Corporate Governance and the director of Hedge Fund Investments at Japan’s Pension Fund Association, which manages more than $120 billion in assets. Ken is also a globally recognized expert on and strong advocate for Japanese corporate governance reform. The opinions expressed by Ken in the podcast are solely his and not those of his organization, the Pension Fund Association.

Ken discussed some of the challenges that Japan faces implementing corporate governance reform. Notably, the practice of cross-shareholdings and the lack of truly independent directors sacrifice corporate success for management stability and dampen investor confidence in Japanese stocks. Ken discusses how cross-shareholding, among other practices, is entrenched due to a host of historic and structural factors. Some of our main takeaways from our exchange with Ken include:

Poor market performance among Japanese stocks suggests a failure to create value and a lack of management accountability. Combined with a refusal to heed international investor concern, this has led to a lack of enthusiasm for Japanese stocks on the part of foreign investors in the past few decades.
The use of cross-shareholding, which is common in Japan, is often cited as the poster-child for Japan’s need for corporate governance reform. Cross-shareholding refers to the practice whereby a web of companies hold significant quantities of each other’s shares, on the promise that each will vote to approve management initiatives.
Holding cross-shares has origins among keiretsu, conglomerates that dominated Japan’s modern economic development. In post-World War II Japan, keiretsu used the practice to provide capital to companies involved in Japan’s re-industrialization. While the conglomerates were dissolved under government law, the practice of cross-shareholding remains, in many cases prizing management control over corporate success.
The appointment of independent directors to corporate boards is relatively new in Japan. A small group of appointed “independent” directors monopolizes the position for thousands of companies and remains beholden to management in most cases.
There are only a handful of reform success stories taking root in Japan. Beyond this, Ken believes collective engagement of domestic and foreign investors can help change corporate behavior.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: The Role of Debt and Shadow Banking in China’s Economy Jan 09, 2019

In this next episode of our series Rethinking Asia, we pick up where we left off last episode looking at the role of debt in China’s economy. We spoke with Charlene Chu, a senior partner for China macro-financial research at Autonomous Research, an independent research firm. Well known for her analysis of China’s shadow banking industry, Charlene previously was a senior director covering Chinese financial institutions at Fitch Ratings.

Charlene gave her assessment of the recent rise in Chinese debt and why she thinks a painless deleveraging is unlikely. While China has implemented some reforms in recent years, it has mostly avoided deleveraging. Previously, China relied on a high deposit base to support credit expansion, but new credit consistently outstrips deposit growth making the levels of credit growth unsustainable. Some of Charlene’s main takeaways include:

China’s debt-to-GDP has increased by nearly 150 percentage points since the Global Financial Crisis, accompanied by a $30 trillion increase in the banking sector. While other countries have experienced large increases in debt-to-GDP before, the size and scale of China’s economy makes the growth alarming.
The vast majority of China’s debt is in the corporate and property sectors. China has also experienced a run up in consumer debt over the last few years, but, currently there is no concern in households’ ability to service the debt.
One of the most troubling aspects of China’s debt problem is the surge in the more opaque and less regulated shadow banking sector. However, the merging of two regulatory bodies should reduce some of the regulatory arbitrage that has allowed off balance sheet lending to grow.
While a financial crisis is not preordained, Charlene dismissed the prospects of a “beautiful deleveraging.” Any attempts to deal with China’s debt burden will require hard decisions, including shuttering less productive companies by forcing them to realize losses, reining in shadow banking, capping credit growth, adjusting lending rates to account for risk, and accepting lower levels of GDP growth.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: China’s Economy: Debt, Financial Risks, and Structural Challenges Dec 18, 2018

In the next two episodes of our series Rethinking Asia, we look at the issue of China’s rising debt. In this first interview, we spoke with Yukon Huang, a senior fellow with the Asia Program at the Carnegie Endowment for International Peace. A renowned expert on China’s economy and its global impact, Yukon formerly served as the World Bank’s country director for China.

Yukon walked us through the recent growth and composition of China’s debt, and why he is more worried about the structural issues behind the debt than the overall level. He also highlighted several important distinctions, such as the large role of shadow banking and the property market, that make China’s debt situation different compared to that of most emerging markets. Some of Yukon’s main takeaways include:

While China’s total debt-to-GDP ratio has rapidly increased about 100 percentage points since the Global Financial Crisis, the level of debt is reasonable for an economy of its structure and nature.
The surge in debt levels is partly driven by the increasing prices of property-related assets in a country whose private property market only emerged roughly 15 years ago.
The primary issue surrounding the surge in debt in China is more of a structural fiscal issue than a financial one: without sufficient tax revenues, local governments use land as collateral and borrow through opaque shadow banking activities to meet obligations.
Unlike other debt-fueled emerging market expansions, the bulk of China’s debt is denominated in its local currency and China’s big state-owned banks steer too much funding into infrastructure at the expense of the private sector.
A balanced approach by Chinese policymakers to financial sector deleveraging will restrict speculative shadow lending while ensuring private firms and local governments can access credit for innovative projects and public services.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Evolving Trends in Trade and Growth in Southeast Asia Nov 23, 2018

In this episode of our series Rethinking Asia, we spoke with Frederic Neumann, Managing Director and Co-Head of Asian Economics Research at HSBC. Currently based in Hong Kong, Fred previously taught graduate level courses at schools in the United States and holds a Ph.D. in International Economics and Asian Studies from the Johns Hopkins School of Advanced International Studies.

Fred guided us through the complex economic dynamics at play between China and ASEAN members. We learned why intra-Asian trade is expected to increase as more trade agreements are signed within Asia, and how China’s Belt and Road infrastructure investment can best help Southeast Asian economies. Some of our main takeaways from our exchange with Fred include:

An earlier period of fierce competition between China and Southeast Asia has given way to an era of greater complementarity with many areas of mutual benefit in the region including increased trade and tourism and integrated supply chains.

However, as many ASEAN economies now have lower average wage costs than China, supply chains are diversifying into Southeast Asia and increasing intra-Asian trade.
U.S. reluctance to join the two major multilateral trade agreements in Asia is accelerating regionalization, or regional engagement and integration fueled by greater economic codependence within Asia.
Chinese Belt and Road investment in Southeast Asia can alleviate domestic constraints in engineering know-how and capital availability to improve infrastructure and link markets, particularly if it steers clear of prestige projects.
A rapidly aging Northeast Asia will raise labor costs and domestic savings, thus paving the way for more foreign investment to flow into relatively younger Southeast Asian economies.
Across Southeast Asia, macroeconomic fundamentals remain sound overall; however, current account deficits in Indonesia and the Philippines appear most vulnerability to global threats.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Womenomics: The Importance of Female Workforce Participation in Japan Nov 02, 2018

In this episode of our series Rethinking Asia, we interviewed Kathy Matsui, vice chair of Goldman Sachs Japan. She is a prominent advocate for women in the workforce, serves as a policy commentator for Japan’s Cabinet Office and has served on multiple Japanese government committees aimed at promoting gender diversity. Kathy guided us through the combination of factors that have led to the current gap between the high skill and education levels of Japanese women and, in many cases, their absence from full-time work. She explained how changes in Japanese government policies and society are addressing this disconnect, and why empowering women is only part of the solution to Japan’s demographic crisis. Some of our main takeaways from our conversation with Kathy include:

Various factors led to this gap between high skill and low participation: insufficient “infrastructure,” such as daycare, prevented many Japanese women from returning to work after giving birth; unaccommodating employer policies have discouraged women’s attempts to re-enter the workforce; and societal preferences have long favored women who opt to stay at home.
Government efforts to improve daycare options and a marginal increase in temporary work visas have helped reverse the trend. However, improving female labor participation is just one prong of a coherent strategy that will be required to tackle a broader demographic challenge and labor shortage.
Gender diversity targets are smart long term goals in the private sector. Gender quotas should be considered in the public sphere, at least temporarily, to ensure public policy decision-making processes accurately reflect the population.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Bringing New Technologies to Financial Authorities Sep 21, 2018

In this episode, we continued our ongoing series on fintech in Asia by interviewing Simone di Castri, the Managing Director of the RegTech for Regulators Accelerator (R²A). The mission of R²A is to enhance the capacity of financial authorities by harnessing innovative technologies and accelerating promising RegTech (regulatory technology) solutions.

Simone guided us through some of the biggest challenges facing financial authorities, and what technological solutions R²A has been developing to help regulators in emerging markets. R²A has so far been focused on enhancing the capabilities of financial authorities in Mexico and the Philippines to better understand markets and customer needs in data-rich environments. Some of our key takeaways include:

A critical challenge in banking supervision is the time and resources required to manage and validate data collected from financial institutions; R²A is solving this using APIs that connect the central bank to financial institutions.

In the Philippines, R²A is prototyping a smartphone chat bot powered by machine learning that will enable any citizen to escalate a problem with their financial provider to the consumer protection team at the central bank.
Emerging and frontier markets are a natural fit for these new tools and techniques given the importance they place on financial inclusion and resource constraints that encourage innovation.

Fast-moving fintech actors have helped spur financial authorities to be more proactive in adopting new technologies in oversight and regulation.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Understanding the Uses of Machine Learning and AI in Finance Sep 07, 2018

In this episode, we continued our ongoing series on fintech in Asia by interviewing David Hardoon, the Chief Data Officer of the Monetary Authority of Singapore (MAS). We spoke with him about the innovative uses of machine learning and the leveraging of big data among banks and the financial system more broadly.

David walked us through how the new Data Analytics Group at MAS is approaching the ethical use of data when so many financial institutions are employing new AI applications. We also discussed the need for awareness of the potential for unsupervised algorithms to either help or hinder financial inclusion. Some of our key takeaways include:

One MAS initiative, FEAT, is focused on four guiding principles for financial institutions concerning the usage of data in AI innovations: fairness, ethics, accountability, and transparency.

Machine learning can be applied in wide range of financial services from insurance to wealth management, for example, by using behavioral data to lower premiums and by offering algorithm-based robo advisory services that market services to a wider swath of people.
Regulators ought to ensure financial institutions understand the risks involved in using algorithms and unsupervised machine learning – are these risks acceptable?
Applications of AI – artificial intelligence – will more likely augment, not replace, financial jobs of the future. The technology is likely to transform the services provided by banks and the roles of bank branches, and will alter the relationship between banks and customers and underscore the importance of data.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: How Increasingly Digital Life can Boost Small Business Access to Finance in Asia Aug 24, 2018

In this episode, we revisited the topic of fintech in Asia by interviewing Sean Creehan, a senior analyst and our colleague here in the Country Analysis Unit. We talked with him about a recent paper he wrote on the how digital innovation can improve financing for small- and medium-sized enterprises (SMEs) in Asia. Sean helped us understand why SMEs, despite their essential role, receive a disproportionately small share of credit from the financial system. We also unpacked the many ways in which new financial technologies and innovative business models can boost SME access to credit and enlarge the pie of economic growth in Asia.

In Asian economies, SMEs typically create at least 50% of new jobs and represent over 40% of GDP, yet receive less than 20% of total bank credit.
The SME credit gap persists because providing financial services to SMEs often involves greater costs and higher risks than lending to larger customers.
Emerging financial technology can support credit to small businesses by significantly lowering costs and through alternative data that improves banks’ ability to assess the risk and credit profile of smaller borrowers.
New fintech applications like blockchain have the potential to improve efficiency in trade finance transactions and integrate more Asian SMEs into the global supply chain.
The increased standardization of commerce on digital platforms in Asia will help SMEs broaden their economic impact by gaining access to more liquidity and investment capital.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Asia Can’t Get Enough Infrastructure Aug 10, 2018

In the fourth episode of Rethinking Asia, we interviewed Matthew Goodman, the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies (CSIS). At CSIS, he leads the Reconnecting Asia program, which tracks how infrastructure is shaping economic and geopolitical realities in Asia.

Our discussion touched on Asia’s huge demand for new infrastructure and the complex geopolitical tensions among regional and multilateral actors. Matthew addressed how countries deal with the risks associated with these large projects and unpacked the role of national strategy, including China’s Belt and Road Initiative. Some of our key takeaways include:

The Asian Development Bank estimates that between 2016 and 2030, Asia needs $26 trillion of infrastructure investment to reduce poverty and expand growth.
International investors see infrastructure projects as a source of long-term return, but often must contend with underlying issues of corruption, land rights, and political risk.
While donor countries seek to lead infrastructure projects to gain commercial or geopolitical benefits, recipient countries pursue projects for growth and domestic political support.
Japanese banks lead the world in infrastructure financing, but recent Chinese efforts – the Belt and Road Initiative and the Asian Infrastructure Investment Bank – are expanding trade connections and raising China’s profile in developing countries.
Most global trade currently takes place via sea, but improved land-based transportation infrastructure in Asia may mean more commerce travels over upgraded freight and truck networks.
To plan and finance physical infrastructure, countries also need many forms of soft infrastructure, like functioning capital markets, customs procedures, credible legal and regulatory regimes, and human capital.

Season 3 - Rethinking Asia: China’s Rising Consumer Class Jul 27, 2018

In our third episode of our series Rethinking Asia, we spoke with Andy Rothman, an investment strategist for Matthews Asia. Prior to joining Matthews Asia, he worked for 20 years in China, and now uses that experience to shape the firm’s thoughts on China from an investment perspective.

Andy helped us understand the growth and current state of Chinese domestic consumption. We discussed China’s efforts to rebalance away from investment and exports towards consumption, and what future growth will look like in China. Some of our main takeaways from our conversation with Andy include:

In 2017, two-thirds of economic growth in China came from consumption, largely because of households.
Household incomes have risen by 120 percent in the past decade, compared to nine percent over that period in the U.S.
Driven by smartphone adoption and non-cash payment platforms, online retail sales in China have continued to experience incredible year-over-year growth.
This healthy consumer story is supported by Chinese households’ habit of saving 30 percent of their incomes – to pay for education expenses and compensate for a weak social safety net – and by their sunny outlook on future growth.
In Rothman’s view, elevated consumer spending on housing is less likely to cause a crisis because, unlike in the U.S. housing market of the 2000s, Chinese buyers must put down a minimum 20 percent down payment and bank due diligence is quite strict. Aging demographics in China have put an end to double-digit growth rates, but real estate isn’t the ticking time bomb most predict.
The government’s consistent measures to raise the minimum wage have nudged all wages higher and have had an outsized impact on the rebalancing to consumption.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Asia’s Diverging Demographic Destinies Jul 13, 2018

In the second episode of our series Rethinking Asia, we spoke with Manoj Pradhan of Talking Heads Macro in London. He's an expert in the relationship between demographics and capital markets, looking at how aging and labor force changes impact everything from global interest rates and wages to inequality. Prior to his current role, he worked as a macroeconomist at Morgan Stanley.

Manoj gives us unique perspectives on how changing demographic trends in Asia will likely affect future inflation and wage growth. We also discuss the challenges posed by aging demographics and automation. Some of our key takeaways from the exchange with Manoj include:

The enormous growth of the global labor supply in the 1980s and 1990s—driven in large part by the integration of China’s labor force—is now reversing. Demographic changes in Europe and Asia will likely upend most people’s expectations regarding future inflation, interest rates, and financial market risks.
Demographic transitions and smaller labor forces are expected to raise inflation and limit central banks’ ability to rein it in without curtailing economic growth.
Within Asia, demographic trends are not uniform: north and east Asian countries are aging quickly while countries like India and Indonesia are benefiting from a demographic dividend, and their growing labor force could make those countries new global manufacturing hubs.
An aging and shrinking work force in China is leading to wage growth and helping the economy rebalance by supporting greater consumption as a share of GDP.
Countries like Japan and Korea face several demographic challenges related to aging: more workers will need to shift into jobs related to aging, governments will be pushed to consider policies to reallocate resources to alleviate inter-generational inequalities, and societies will need to adjust to permanently smaller labor forces.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 3 - Rethinking Asia: Japan’s Complicated Role as a Global Safe Haven Jun 29, 2018

Today, we launch a new series, Rethinking Asia, as we consider noteworthy and unusual trends in Asian finance and economics. In our first episode, we sat down with Jesper Koll, head of Japan at WisdomTree, a global asset manager. In our conversation, Jesper explains in depth the history and forces behind Japan’s distinction as a safe haven for global investors. He explains why assets like the yen and Japanese government bonds rally during periods of regional or global turmoil.

Some of the key takeaways from our conversation with Koll include:

The Japanese yen has been known for some time as a safe haven currency; when global investors are in risk-off mode, the yen strengthens.
There are a few forces behind the safe haven status: as one of the predominant funding currencies of global financial markets, investors borrow in yen to invest in higher yielding assets during periods of calm. However, during periods of volatility, investors unwind those positions to close (pay back) open yen positions, causing the yen to appreciate.
In addition, there is the market perception that Japanese asset managers (such as pension funds and insurance companies) repatriate their portfolios back to Japan during crises causing yen appreciation. However, this has been proven to be more myth than reality.
The yen’s liquidity –it is one of the few deep, liquid, freely traded currencies in the Asian time zone—makes it a candidate for funding positions and also exacerbates reactions during periods of risk-off sentiment.
Given the increasing importance of China to the global economy and continued restrictions on that country’s capital account, Japan is experiencing more volatility when investors react to events in China.
The Swiss franc behaves much like the Japanese yen. Like the yen, the franc is a funding currency for international speculators. It acts like a safe haven asset, and appreciates during bouts of market volatility.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 2 - Looking Back at the Asian Financial Crisis: Asian Financial Crisis Series Wrap-up Feb 12, 2018

In the final episode of our series on the Asian financial crisis, we take a look back at key themes and takeaways from our conversations. We also discuss Nick’s recent research paper on Asian bond market developments since the crisis.

Some of the key themes we review:

Most of our guests focused on the role of fixed exchange rates, foreign currency debt, and capital control liberalization.
Still, 20 years later, there remain differing views on the importance of failed Asian corporate governance versus speculative foreign capital inflows in driving excessive risk taking ahead of the crisis.
The region’s reaction to the crisis—notably a movement towards more flexible exchange rates and a build-up in foreign exchange reserves—led to a sea change in global capital flows, a shift some analysts consider as a contributor to the 2008 global financial crisis a decade later.
Many problems previously considered distinct to emerging markets in the wake of the Asian Financial Crisis now appear to be universal.
China faces a number of challenges similar to those of emerging Asian economies in the 1990s, including a rapid build-up in credit and currency management in the face of volatile capital flows.
Asia’s bond markets have grown significantly over the past two decades and represent a growing alternative to the banking system. Whether these markets can provide a “spare tire” in time of crisis remains debatable, however.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Why Chinese Mobile Payments are Expanding Abroad Dec 12, 2017

In this episode of our series on financial technology, we sat down with Souheil Badran, president of Alipay North America. Alipay is the payments spinoff of China’s ecommerce giant Alibaba and is now part of Ant Financial, the largest fintech company in the world.

Some of the key takeaways from our conversation with Souheil include:

China’s mobile payment platforms have become “lifestyle apps”. Chinese consumers use their phones to make payments for everything from taxis and movie tickets to insurance and mutual funds.
Every year, Chinese tourists take 130 million trips outside of China. Chinese mobile payment firms are expanding internationally in order to service these customers when they are travelling abroad.
The rapid growth of mobile payments in China was driven by the lack of payments infrastructure for credit and debit cards. Chinese fintech companies offered merchants a cheaper solution through the use of QR codes.
Data from payments activity has allowed Chinese fintech companies to create their own credit scores for users and make small loans to them.
The same types of fintech services are available in both China and the U.S., but the Chinese market is different because these services are all available on a single “platform” rather than distributed across multiple different apps.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: How Technology can Build Trust for the Newly Banked Dec 06, 2017

In this episode of our series on financial technology, we sat down with Katie Macc, co-founder and chief operating officer of Juntos Global, a fintech company that serves as a bridge between financial access and financial inclusion for the world's newly banked. Kate tells us about the ways technology can help solve many of the problems facing the unbanked around the world.

Some of the key takeaways from our conversation include:

Lack of trust is a key barrier to getting the newly banked to use their new accounts.
For fintech products to be successful, new users need to trust the financial institution, the product itself, and their own ability to use it.
Socioeconomic status can play a huge role in how people use fintech. The differences between users within a country can be greater than similar groups across multiple countries.
Necessity is the mother of innovation. Fintech in emerging markets has been forced to adapt to low profit margins and information constraints. These experiences could offer insights for firms aiming to fill gaps in financial inclusion in the United States.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: How Regulatory Sandboxes are Shaping Fintech in Asia Nov 30, 2017

In this episode of our series on financial technology, we sat down with Kate Lauer, a senior policy advisor at CGAP. Kate is an expert in microfinance, financial inclusion and global financial regulation. She is currently researching the impact of regulatory sandboxes on fintech and financial inclusion.

Some of the key takeaways from our conversation with Kate include:

Regulatory sandboxes are a two-way street, allowing fintech companies to learn about regulation, but also allowing regulators to learn about fintech.
Creating a level platform for fintech companies to compete, while also mitigating risks, is one of the primary challenges facing regulators.
There are very large differences in the structure of Asian regulatory sandboxes.
Asia faces an immense financial inclusion problem, but some of the most interesting financial inclusion efforts are taking place in the region.
Bringing people into the formal financial system touches upon complicated issues of taxation and privacy.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 2 - Looking Back at the Asian Financial Crisis: Don Hanna on the Role of Foreign Investors in the Asian Financial Crisis Oct 30, 2017

In the eighth episode of our series on the Asian financial crisis, we spoke with Don Hanna, a prominent international economist who has advised investors on Asia for over three decades. Don has worked as an economist at a variety of global financial institutions and multilateral organizations and lived in the region for 16 years. He has written extensively on Asia’s economic and financial development since the crisis.

Some of the key takeaways of our conversation include:

Foreign investors had a more nuanced view of Asia during the crisis than is commonly acknowledged. While some prominent hedge funds were famously short the Thai Baht, they had a more balanced view of other Asian economies, such as Indonesia.

Investors often confuse the difference between real and nominal rates when investing in overseas markets. This can lead to insufficient risk analysis and, in the worst case, rapid outflows when investors suddenly discover the difference.

While capital controls can be helpful as a country slowly liberalizes its financial system, sound regulation is arguably more important in preventing and managing crises.

Since the crisis Asian economies are increasingly issuing debt in their own local currencies. This is a noteworthy development and has the potential to reduce the risks associated with currency mismatches.

Financial innovation to spur productivity growth, but that innovation can create risks that are often unforeseen and perhaps unknowable in advance. Regulators have to find a balance between promoting innovation and controlling risks.

Season 2 - Looking Back at the Asian Financial Crisis: Barry Eichengreen on the East-West Debate over the Asian Financial Crisis Oct 17, 2017

In the seventh episode of our series on the Asian financial crisis, we spoke with Barry Eichengreen, a professor of economics and political science at UC Berkeley. He's written extensively about the sequencing of financial opening in Asia and the challenges associated with cross-border capital flows. He's also authored numerous articles looking back on the lessons from the Asian financial crisis.

Season 2 - Looking Back at the Asian Financial Crisis: Supavud Saicheua on how the Asian Financial Crisis Shook Thailand Oct 02, 2017

We spoke with Supavud Saicheua, Head of Economic Research at Phatra Securities, about Thailand’s role in the Asian financial crisis. In our conversation, Supavud discusses the economic and financial risks that developed in Thailand during the 1990s and how they led to the crisis. He also explains how the Thai economy has changed in the decades since the crisis and what risks remain today.

Some of the key takeaways of our conversation with Supavud include:

After a long period of stability, Thai borrowers had excessive confidence in the stability of the exchange rate and took on large amounts of foreign currency debt.
When investors lost faith in Thailand, they began to notice similar problems in other Asian economies, causing the crisis to spread across the region.
The policy reforms recommended to Thailand after the crisis led to a sharp increase in interest rates, putting further stress on banks and companies.
Thailand’s recovery was slower than other Asian economies due to its aging society, increasing competition from other economies in the region, and political unrest in the wake of the crisis.
Leverage plays a key role in all financial crises, including the Asian financial crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System

Season 2 - Looking Back at the Asian Financial Crisis: Changyong Rhee on Korea and the Asian Financial Crisis Sep 18, 2017

In the third episode of our series on the Asian financial crisis, we spoke with Changyong Rhee, the Director of Asia Pacific Department at the IMF. Changyong is a well-respected economist who has worked as an academic, an advisor to the Korean government, and at a variety of international institutions. He brings along many years of experience covering economic and financial developments in Asia.

Some of the key takeaways of our conversation with Changyong include:

Korean policymakers were aware of the risks of opening up financial markets and pursued a gradual and indirect approach to capital account liberalization.

Financial liberalization prioritized indirect borrowing by financial institutions, rather than more stable FDI, making Korea susceptible to capital outflows during the crisis.

Although strong cooperation between the government, conglomerates, and banking sector was critical to South Korea’s growth, it also created large moral hazard problems.

The IMF program helped Korea restructure its economy and become more resilient to financial shocks, but some of the policy recommendations created domestic backlash.

While Asian economies are in a far stronger position compared to the past, there are still significant economic risks stemming from high leverage and rapid demographic aging.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System

Season 2 - Looking Back at the Asian Financial Crisis: Changyong Rhee on Korea and the Asian Financial Crisis Sep 18, 2017

In the next episode of our series on the Asian financial crisis, we spoke with Changyong Rhee, the Director of Asia Pacific Department at the IMF. Changyong is a well-respected economist who has worked as an academic, an advisor to the Korean government, and at a variety of international institutions. He brings along many years of experience covering economic and financial developments in Asia.

Some of the key takeaways of our conversation with Changyong include:

Korean policymakers were aware of the risks of opening up financial markets and pursued a gradual and indirect approach to capital account liberalization.

Financial liberalization prioritized indirect borrowing by financial institutions, rather than more stable FDI, making Korea susceptible to capital outflows during the crisis.

Although strong cooperation between the government, conglomerates, and banking sector was critical to South Korea’s growth, it also created large moral hazard problems.

The IMF program helped Korea restructure its economy and become more resilient to financial shocks, but some of the policy recommendations created domestic backlash.

While Asian economies are in a far stronger position compared to the past, there are still significant economic risks stemming from high leverage and rapid demographic aging.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System

Season 2 - Looking Back at the Asian Financial Crisis: Simon Johnson on Lessons From the Asian Financial Crisis Sep 05, 2017

In the fourth episode of our series on the Asian financial crisis, we talked with Simon Johnson,

Some of the key takeaways of our conversation with Simon include:

The Asian Financial Crisis was the result of countries running large current account deficits stemming from overvaluation, rather than overinvestment.

Corporate governance played a significant role during the crisis. Emerging Asian countries had similar governance problem and vulnerabilities, mainly rooted in family ownership of firms.

Because many of the affected countries were export-oriented, they took advantage of the large depreciation in the real exchange rate in order regain competitiveness and recover from the crisis.

After the crisis, policymakers’ views on capital liberalization changed and many now agree that emerging markets should limit capital inflows during booms.

Safeguard measures for future crises involve increasing transparency in governance, as well as implementing high and robust capital requirements and funding policy on bank management.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System

Season 2 - Looking Back at the Asian Financial Crisis: Andrew Sheng on Hidden Linkages and the Asian Financial Crisis Aug 21, 2017

In the third episode of our series on the Asian financial crisis, we talked with Andrew Sheng, a Distinguished Fellow at the Asia Global Institute. Andrew has worked as a central banker, financial regulator, academic, and advisor to numerous Asian financial organizations. He had firsthand experience of the Asian financial crisis when he was serving served as the Deputy Chief Executive of the Hong Kong Monetary Authority.

Some of the key takeaways of our conversation with Andrew include:

The financial linkages and interdependencies among different countries in Asia were not fully understood prior to the crisis and made policy response difficult.
The depreciation of the Japanese yen led to a regional economic slowdown, exposing risks that would ultimately precipitate the crisis.
Many of the problems that created the Asian financial crisis were left unresolved—such as inadequate response to insolvency— and these issues would later contribute to the global financial crisis.
Currency pegs can be useful, but economies must be willing to endure a lot of pain to maintain them.
Policymakers must be clear on whether they are facing a liquidity crisis or a solvency crisis. The policy prescriptions for each are very different.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 2 - Looking Back at the Asian Financial Crisis: Gillian Tett on Trust and Contagion During the Asian Financial Crisis Aug 07, 2017

In the second episode of our series on the Asian financial crisis, we talked with Gillian Tett, U.S. managing editor of the Financial Times. Gillian was based in Asia at the time of the crisis and witnessed it spread across the region. In the interview, she relays her experience in Asia in 1997 and how it helped her spot warning signs ahead of the 2008 global financial crisis.

Some of her key takeaways include:

Contagion caused the crisis to spread across Asia. Investors lumped all of Asia’s problems together, sometimes without clear connection or rationale.
Japan is not typically considered to be at the center of the Asian financial crisis, but the crisis drew attention to the country’s unresolved banking problems.
When the Japanese government forced the recognition of bad assets in 1997, it led to a sharp erosion of public faith in the financial system because it challenged existing notions that the government would support banks.
When it became clear that the Japanese financial system lacked transparency, risky assets could not be priced effectively, and private savers and investors froze all activity.
Fast economic growth can lead to complacency around risks. Rapid Japanese growth in the 1980s led to the overlooking of mounting risks, a mistake that would be repeated by other countries in the run up to the global financial crisis.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 2 - Looking Back at the Asian Financial Crisis: David Dollar on Marking the 20th Anniversary of the Asian Financial Crisis Jul 24, 2017

Twenty years ago, a financial crisis emerged across Asia and threatened the entire regional economy. The crisis led to a huge drop in economic activity, a sharp depreciation of local currencies, and massive losses to the stock markets. Drastic action by domestic policymakers and significant international aid halted the crisis, but not before it caused tremendous economic pain across the region.

In the wake of the crisis, countries across the region implemented a broad range of reforms, many of which were successful as Asia returned to rapid growth in the 2000s. However, the influence of the crisis shaped the development of the region throughout the 2000s through to today.

To mark the anniversary, today we launch a new series looking back at the crisis 20 years later. In the first episode, we sat down with David Dollar, a senior fellow at the Brookings Institution. David worked as an economist at the World Bank for 20 years, focusing on a variety of Asian economies. He also served as the U.S. Treasury’s economic and financial emissary to China, based in Beijing. David has written numerous scholarly articles on Asian economics and is a frequent public commentator on the region.

David gives a great overview of the Asian financial crisis, including its origins and long-term impacts. Some of the key takeaways include:

Reliance on cheap borrowing in foreign currencies created financial vulnerabilities across the region that led to the crisis.

A debt crisis that started in the private sector grew until it became a general macroeconomic crisis, impacting the finances of national governments.

China played a broadly stabilizing role during the crisis, resisting temptations to depreciate its currency.

Few emerging markets have opened up their financial systems without undergoing a period of financial instability.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Lessons from China’s Peer-to-Peer Lending Boom Jul 05, 2017

In this episode of our series on financial technology, we sat down with Ning Tang, founder and CEO of CreditEase. Ning has been a leader in the development of China’s peer-to-peer (P2P) lending industry and has a unique perspective on the development of fintech worldwide.

Some of the key takeaways from our conversation with Ning include:

P2P lending in China has helped borrowers overlooked by traditional financial institutions.

Many Chinese fintech firms were initially reluctant to share data, but data sharing has turned out to be a benefit for the entire industry.

Regulation of P2P lending has increased as the industry has grown in size.

As the industry has matured, banks have become essential partners for P2P firms.

A combination of traditional and alternative data sources work best for making credit assessments.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Mobile Payments and Financial Inclusion in Myanmar Jun 09, 2017

In this episode of our series on financial technology, we sat down with Jason Loughnane, microfinance specialist with Accion International in Myanmar. Jason is an expert on the potential for mobile payments and other financial technologies to promote financial inclusion in emerging markets.

Some of the key takeaways from our conversation with Jason include:

Access to mobile payments in Myanmar has grown rapidly as the cost of cell phone ownership has declined.

Mobile payments have the potential to dramatically improve the efficiency of microfinance projects and expand the geographic range of areas they can service.

Competition can drive down the price of mobile payments, but it’s essential that providers have sustainable business models.

People often use microfinance loans in surprising ways – and that can be a good thing.

Myanmar is on track to experience a boom in mobile payments growth over the next five years.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Asia's Fintech Revolution May 11, 2017

Asia is currently in the midst of a fintech revolution, with new technologies and startups that could disrupt various financial services in economies across the region. In this episode of Pacific Exchanges, CAU analyst Cindy Li sat down with Nicholas Borst and Sean Creehan to discuss their recent paper on fintech developments in Asia.

Some of the key takeaways from the conversation include:

The payments and lending sectors are facing the highest levels of fintech-driven disruption.

China has emerged as a leader within the region on both mobile payments and peer-to-peer lending.

Both Asian banks and regulators are actively experimenting with virtual currencies and blockchain.

Fintech innovations have the potential to improve access to credit for Asian SMEs and reduce remittance costs.

A number of Asian economies have established regulatory sandboxes to allow banks and startups to experiment with new technologies.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Special Report: Shadow Banking in China Feb 16, 2017

Shadow banking has grown quickly in China, driven by regulatory arbitrage and the growing role of non-bank financial institutions in the financial sector. In this episode of Pacific Exchanges, we sat down with our colleague Cindy Li to discuss her recent paper on shadow banking in China.

Some of the key takeaways from our conversation with Cindy include:

Shadow banking in China differs significantly from shadow banking in the U.S. and other advanced economies.

Chinese shadow banking has evolved significantly in recent years in response to actions by financial regulators.

Differentiating between financial innovation and shadow banking is often difficult.

Wealth management products are a popular investment for individual investors in China, but they come with significant potential risks.

Shadow banking in China is set to continue growing in size and complexity.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: China Takes the Lead in Payments Innovation Dec 26, 2016

In the fifth episode of our series on financial technology, we sat down with Zhong Wang, Head of Strategy and Overseas Payments for Baidu Wallet and Payment Services. Zhong is a veteran of both Silicon Valley and the Chinese tech industry and is an expert on the retail payments sector in China.

We invited Zhong to speak with us about why innovations in payments are occurring so rapidly in China, the competitive threat that new payment companies represent to banks, and how developments in payments may impact other parts of the Chinese financial system. The conversation covers a number of interesting topics. For example, can new payments technologies help bring financial services to China’s large underbanked population? Is there a generation gap between the young and old in terms of adopting mobile payments? Will Chinese payment companies be able to expand to other rapidly developing Asian economies? Zhong also explains what he sees as some of the biggest differences between Silicon Valley and tech companies in China.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: How Fintech Can Improve Small Business Lending in Asia Dec 12, 2016

In the fourth episode of our series on financial technology, we sat down with Anju Patwardhan, a Fulbright Fellow researching fintech at Stanford University who previously served as the Chief Innovation Officer for Standard Chartered Bank, one of the world’s largest and most international banks. Anju is currently researching the potential for financial technology to increase financial inclusion, particularly for small businesses, at Stanford University. She also serves as a Venture Partner for the Fintech Investment Fund of Creditease, one of China’s largest fintech firms.

We invited Anju to speak with us about her experiences managing fintech activities at a bank, the potential for collaboration and competition between fintech start-ups and traditional banks, and her research activities at Stanford. This conversation touches on a number of interesting subjects. For example, are fintech start-ups competitors or partners for traditional financial institutions? What’s the role of fintech in expanding financial inclusion? Anju also explains how fintech firms are leveraging alternative data sources to improve SME lending.

Find Anju on LinkedIn and Twitter.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: The State of Fintech in Japan Nov 28, 2016

In the third episode of our series on financial technology, we sat down with Shuhei Aoki, Executive Strategist at Hitachi and advisor to the President of Hitachi’s Information and Telecommunications Systems Company. Before joining Hitachi, Shuhei served as the Director General of Payment and Settlement Systems at the Bank of Japan. He is also an Associate Professor at Shinshu University, where he teaches and conducts research on resource allocation and macroeconomic productivity.

Hitachi is one of Japan’s leading industrial conglomerates, manufacturing everything from TVs to tanks and quite likely some of the electronics that power the device you are using to listen today. What Hitachi is not necessarily known for is financial services, but earlier this year they established a Financial Innovation Lab here in the Bay Area.

We invited Shuhei to speak with us about the reason non-financial companies are getting involved in FinTech and how the space is impacting Asia and places like Hitachi’s home market of Japan. Our chat covers a number of interesting topics, including the role of cash in an increasingly digital world, how banks view the rise of fintech, and the Bank of Japan’s early consideration of a virtual national currency not unlike Bitcoin.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: How Fintech can Promote Financial Inclusion in Asia Nov 14, 2016

In the second episode of our series on financial technology, we sat down with Sacha Polverini, Senior Program Officer at the Bill and Melinda Gates Foundation and Chairman of the Focus Group on Digital Financial Services for Financial Inclusion at the International Telecommunication Union (ITU), a United Nations agency that deals with information and communication technologies.

We invited Sacha to speak with us about the challenge of financial inclusion in Asia and how fintech can make a difference. Asia is at the center of global efforts to deliver financial services to the unbanked. As of 2015, an estimated 1 billion people in Asia lacked access to a bank account. Our conversation covers a number of topics, from how we measure financial inclusion and define its success to the types of technologies that can have the greatest impact on people’s lives. Sacha talks about policy successes and experimentation in countries like Kenya and India, the role of both telecommunications and financial firms in promoting inclusion, and how smart policies can pave the way for new financial innovations aimed at serving the poor.

Sacha works at the Gates Foundation’s Financial Services for the Poor, a program which aims to foster the development of digital financial services like mobile money in the developing world. At the ITU, he chairs a committee which seeks to bring together government regulators, service providers, and international organizations to share ideas about how to scale up digital financial services globally.

Find Sacha’s writing at the Gates Foundation, ITU, and on LinkedIn and Twitter.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

Season 1 - Fintech in Asia: Regulating Fintech in Singapore Oct 31, 2016

In the first episode of our series on financial technology, we sat down with Sopnendu Mohanty, the Chief Fintech Officer at the Monetary Authority of Singapore (MAS). We invited Sopnendu to speak with us about the role of fintech in Singapore’s financial system and the central bank’s approach to encouraging innovation while managing risk.

Singapore is one of Asia’s leading financial centers, a hub of global trade, and a natural place for fintech to take root. The rapid growth of Singapore’s fintech sector has implications for both the financial sector and real economy. The MAS has recently announced a new “regulatory sandbox” approach to encourage existing financial institutions and non-traditional firms to develop fintech solutions in Singapore. The MAS itself has acted as a middleman to bring together banks and startups and has created a “regulatory sandbox” a space for experimenting with new technologies on a small scale without running into regulatory barriers.

As Chief Fintech Officer, Sopnendu is responsible for creating MAS’s development strategies and regulatory policies around technology innovation to “better manage risks, enhance efficiency and strengthen competitiveness in the financial sector”. Prior to joining MAS, he was with Citibank as their Global Head of the Consumer Lab Network and Programs, which included driving innovation programs and managing innovation labs across multiple geographies globally.

Sopnendu has held various roles in technology, finance, productivity, and business development over the past twenty years and he has been awarded four patents in the area of retail distribution of financial services.

MAS Smart Financial Center

MAS Fintech Innovation Group

Sopnendu on LinkedIn and Twitter

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.