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Toni Ahnert

Research

Division

Financial Research

Current Position

Lead Economist

Fields of interest

Financial Economics,International Economics,Macroeconomics and Monetary Economics

Email

Toni.Ahnert@ecb.europa.eu

Other current responsibilities
2022-

Secretary, ECB Working Paper Series

2018-

Research Affiliate, Centre for Economic Policy Research

Education
2008-13

PhD in Economics, London School of Economics, London, UK

Professional experience
2018-21

Research Advisor, Bank of Canada

2016-18

Principal Researcher, Bank of Canada

2013-16

Senior Economist, Bank of Canada

Awards
2011

Lamfalussy Fellowship, ECB

31 October 2022
RESEARCH BULLETIN - No. 100
Details
Abstract
Central banks around the world are exploring the case for central bank digital currency (CBDC) – essentially a digital version of cash. In this article, we provide an overview of the economics of CBDC (Ahnert et al., 2022a). First, we outline the economic forces that shape the rise of digital money and motivate the current debate. We then look at the implications for monetary policy and financial stability before discussing policy issues and challenges. Finally, we highlight several areas where our understanding of digital money could be improved by further research.
JEL Code
E41 : Macroeconomics and Monetary Economics→Money and Interest Rates→Demand for Money
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
16 August 2022
WORKING PAPER SERIES - No. 2713
Details
Abstract
This paper provides a structured overview of the burgeoning literature on the economics of CBDC. We document the economic forces that shape the rise of digital money and review motives for the issuance of CBDC. We then study the implications for the financial system and discuss of a number of policy issues and challenges. While the academic literature broadly echoes policy makers’ concerns about bank disintermediation and financial stability risks, it also provides conditions under which such adverse effects may not materialize. We also point to several knowledge gaps that merit further work, including data privacy and the study of end‐user preferences for attributes of digital payment methods.
JEL Code
E41 : Macroeconomics and Monetary Economics→Money and Interest Rates→Demand for Money
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
Network
Discussion papers
15 August 2022
WORKING PAPER SERIES - No. 2710
Details
Abstract
We study third-party loan guarantees in a model in which lenders can screen, learn loan quality over time and can sell loans before maturity when in need of liquidity. Loan guarantees improve market liquidity and reduce lending standards, with a positive overall welfare effect. Guarantees improve the average quality of non-guaranteed loans traded and thus the market liquidity of these loans due to both selection and commitment. Because of this positive pecuniary externality, guarantees are insufficient and should be subsidized. Our results contribute to a debate about reforming government-sponsored mortgage guarantees by Fannie Mae and Freddie Mac.
JEL Code
G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
13 May 2022
WORKING PAPER SERIES - No. 2662
Details
Abstract
We study a model of financial intermediation, payment choice, and privacy in the digital economy. Cash preserves anonymity but cannot be used for more efficient online transactions. By contrast, bank deposits can be used online but do not preserve anonymity. Banks use the information contained in deposit flows to extract rents from merchants in need of financing. Payment tokens issued by digital platforms allow merchants to hide from banks but enable platforms to stifle competition. An independent digital payment instrument (a CBDC) that allows agents to share their payment data with selected parties can overcome all frictions and achieves the efficient allocation.
JEL Code
D82 : Microeconomics→Information, Knowledge, and Uncertainty→Asymmetric and Private Information, Mechanism Design
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
3 May 2022
WORKING PAPER SERIES - No. 2658
Details
Abstract
We offer a theory of financial contagion based on the information choice of investors after observing a financial crisis elsewhere. We study global coordination games of regime change in two regions linked by an initially unobserved macro shock. A crisis in region 1 is a wake-up call to investors in region 2. It induces them to reassess the regional fundamental and acquire information about the macro shock. Contagion can occur even after investors learn that region 2 has no ex-post exposure to region 1. We explore normative and testable implications of the model. In particular, our results rationalize evidence about contagious currency crises and bank runs after wake-up calls and provide some guidance for future empirical work.
JEL Code
D83 : Microeconomics→Information, Knowledge, and Uncertainty→Search, Learning, Information and Knowledge, Communication, Belief
F3 : International Economics→International Finance
G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
3 April 2014
WORKING PAPER SERIES - No. 1667
Details
Abstract
I study rollover risk in the wholesale funding market when intermediaries can hold liquidity ex-ante and are subject to fire sales ex-post. I demonstrate that precautionary liquidity restores multiple equilibria in a global rollover game. An intermediate liquidity level supports both the usual run equilibrium and an efficient equilibrium. I provide a uniqueness refinement to characterize the privately optimal liquidity choice. Because of fire sales, liquidity holdings are strategic substitutes. Intermediaries free-ride on the liquidity of other intermediaries, causing excessive liquidation. A macro-prudential authority internalizes the systemic nature of liquidity and restores constrained efficiency by imposing a macro-prudential liquidity buffer.
JEL Code
G01 : Financial Economics→General→Financial Crises
G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
Network
ECB Lamfalussy Fellowship Programme
2022
Review of Finance
A Wake-up Call Theory of Contagion
  • Toni Ahnert and Christoph Bertsch
2021
Journal of Banking and Finance
Cheap but flighty: A theory of safety-seeking capital flows
  • Toni Ahnert and Enrico Perotti
2021
Journal of Financial Economics
Macroprudential FX Regulations: Shifting the Snowbanks of FX Vulnerability?
  • Toni Ahnert, Kristin Forbes, Christian Friedrich, Dennis Reinhardt
2021
Journal of Financial Intermediation
Should bank capital regulation be risk-sensitive?
  • Toni Ahnert, James Chapman, Carolyn Wilkins
2020
Journal of Financial Stability
Bank Runs, Portfolio Choice and Liquidity Provision
  • Toni Ahnert, Mahmoud Elamin
2019
Review of Financial Studies
Asset Encumbrance, Bank Funding and Fragility
  • Toni Ahnert, Kartik Anand, Prasanna Gai, James Chapman
2018
Journal of Financial Stability
Information Contagion and Systemic Risk
  • Toni Ahnert, Co-Pierre Georg
2017
Review of Financial Studies
Information Choice and Amplification of Financial Crises
  • Toni Ahnert, Ali Kakhbod
2016
Journal of Money, Credit and Banking
Rollover Risk, Liquidity and Macroprudential Regulation
  • Toni Ahnert