Central Bank Supervision in the Digital Age

  • Robert E. Litan


The term “digital age” is on the verge of being overused and means a variety of things to different people. I will use it here, in the context of discussing financial services and their regulation, as a catch-all phrase to refer broadly to several interrelated phenomena that each have been facilitated by the increasing power of computers and speed of communication:
  • the increasing sophistication and complexity of financial instruments (especially derivatives);

  • the increasingly complex nature of financial strategies (trading and hedging in particular);

  • the increasingly rapid transmission of information (financial and otherwise) between financial institutions, financial institutions and their customers, among users of financial markets and the markets themselves, and among all of these actors across national borders.


Financial Institution Smart Card Large Bank Trading Book Market Discipline 
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  1. Council on Foreign Relations (1999), Safeguarding Prosperity in a Global Financial System: The Future International Financial Architecture, Report of an Independent Task Force (Council on Foreign Relations).Google Scholar
  2. Friedman, B. (forthcoming), The Future of Monetary Policy: The Central Bank as an Army with only a Signal Corps?, in: R. Cooper and R. Layards (eds.), Social Science and the Future (The MIT Press, Cambridge and London).Google Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Robert E. Litan
    • 1
  1. 1.Brookings InstitutionUSA

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