(28 October 2024 – Global) Reserve bank governors across Europe, Africa and Asia differ markedly over pursuing investment in bilateral versus multilateral links.
Central bankers at the International Monetary Fund (IMF) and World Bank annual meeting disagreed on whether fast cross-border payment links should be bilateral or multilateral.
The Bank for International Settlements (BIS) believes multilateral links should be prioritised because this would make negotiations simpler. Alternatively the governor of the Bank of Italy, Fabio Panetta, said that although bilateral arrangements would increase the number of linkages, multilateral agreements would come with increased complexity.
“We are not model-agnostic. A model has to be tailored to the size and type of network that is being constructed whether you’re building a spaghetti bowl or a spoke and hub” commented ECB President Christine Lagarde.
“Cross-border payments infrastructure is in transition, and creaking in some corners of the globe. The risks from these projects are increased exposure to foreign assets and the potential for foreign currency substitution” stated IMF Financial Counsellor Tobias Adrian.