The Future of Financial Systems in the Digital Age

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The increasing capacity of digital networks and computing power, together with the resulting connectivity and availability of “big data”, are impacting financial systems worldwide with rapidly advancing deep-learning algorithms and distributed ledger technologies. They transform the structure and performance of financial markets, the service proposition of financial products, the organization of payment systems, the business models of banks, insurance companies and other financial service providers, as well as the design of money supply regimes and central banking.

This book, The Future of Financial Systems in the Digital Age:  Perspectives from Europe and Japan, brings together leading scholars, policymakers, and regulators from Japan and Europe, all with a profound and long professional background in the field of finance, to analyze the digital transformation of the financial system. The authors analyze the impact of digitalization on the financial system from different perspectives such as transaction costs and with regard to specific topics like the potential of digital and blockchain-based currency systems, the role of algorithmic trading, obstacles in the use of cashless payments, the challenges of regulatory oversight, and the transformation of banking business models. The collection of chapters offers insights from Japanese and European discourses, approaches, and experiences on a topic otherwise dominated by studies about developments in the USA and China.

Markus Heckel is Senior Research Fellow at the German Institute for Japanese Studies (DIJ) since November 2018 and holder of a Ph.D. in economics from the University of Duisburg-Essen. From 2012 to 2018, he worked in the Faculty of Economics and Business Administration at Goethe University Frankfurt. His main research interests include macroeconomics, monetary policy, and the political economy of central banks. His recent publications include Unconventional Monetary Policy Through Open Market Operations: A Principal Component Analysis (co-authored with Kiyohiko G. Nishimura) and Employees Who Do Not Know Their Labour Contract Term and the Implications for Working Conditions: Evidence from Japanese and Spanish Microdata (Japan and the World Economy, 2019, co-authored with Yuji Genda and Ryo Kambayashi). 

Franz Waldenberger is Director, German Institute for Japanese Studies. He is on leave from Munich University, where he holds a professorship forJapanese Economy. His research focuses on the Japanese economy, corporate governance, and international management. He is Editor in Chief of the international peer-reviewed journal Contemporary Japan. His recent publications include The Digital Transformation. Implications for the Social Sciences and Humanities, DIJ, 2020 (co-edited with Harald Kümmerle), and Governance, Risk, and Financial Impact of Mega Disasters: Lessons from Japan, Springer 2019 (co-edited with Akiko Kamesaka).