The Bank for International Settlements (BIS) has selected the Bank of England to host its fourth innovation hub and announced plans to open others across the northern hemisphere. Hubs have been already been established in Basle, Hong Kong and most latterly, Singapore after the BIS initiated the programme in July 2019 to help foster collaboration on financial technology in the central banking community.
The UK centre will support the global central banking and finance community through the development of digital public goods – addressing issues of critical importance for the global financial system. The Bank of England says in a release that the decision to establish this centre is “a reflection on the UK’s position as a world leader in innovation and technology in finance, with global leadership evident across the private, government and regulatory sectors”.
In the next two years, the BIS says it will also open centres in collaboration with the Bank of Canada (Toronto), the European Central Bank/Eurosystem (Frankfurt and Paris) and four Nordic central banks (Danmarks Nationalbank, the Central Bank of Iceland, the Central Bank of Norway and Sveriges Riksbank) in Stockholm. The BIS will also form a strategic partnership with the Federal Reserve System (New York).
“With this expansion, the Innovation Hub will be well placed to advance work on a broad range of issues of importance to the central banking community, including digital currency and digital payments, cyber security, distributed ledger technology and artificial intelligence,” says Benoît Cœuré, head of the BIS Innovation Hub. “This expansion is a testament to the central banking community’s commitment to innovation and cooperation.”
Bank of England governor, Andrew Bailey, says,“I am delighted that we will be hosting a centre of the BIS Innovation Hub here at the Bank. International collaboration is vital if we are to take full advantage of the possibilities offered by technology and innovation. Now more than ever it is important the central banking community does all it can to build a more effective, resilient and inclusive financial system, and technology is an important part of that effort.
“By involving central banks and prudential regulators in this important work, we can help to ensure that innovation is consistent with our objectives of safety and soundness and financial stability,” he continues. “This centre provides an important venue to ensure the UK’s deep expertise in innovation can contribute to solving global financial issues.”
UK Chancellor of the Exchequer, Rishi Sunak adds, “The UK is home to a world-leading fintech sector and is at the forefront of innovation – so it’s fantastic the Bank of International Settlements has chosen to establish a Hub Centre in London. It presents an invaluable opportunity to connect the expertise of the world’s central banks, working collaboratively on innovative new ways to enhance financial services.”