© Muhammad Ali Nasir

Upon invitation by the Institute for International Monetary Research, Uwe Schollmeyer, a lecturer at the Bundesbank’s University of Applied Sciences, took part in a two-day conference on “The Economics of Monetary Unions: Past Experiences and the Eurozone”. The conference was held on 21 and 22 February 2019 at the University of Buckingham in the United Kingdom.

Speakers came from all corners of Europe to discuss current challenges facing the euro. The topics covered included a discussion of earlier monetary unions in Europe and the gold standard, the measurement of internal macroeconomic imbalances in the euro area, payment systems and payment flows in the euro area, and the reforms needed to strengthen the euro.

© Muhammad Ali Nasir

In a session moderated by Charles Goodhart (London School of Economics), Uwe Schollmeyer and Hans-Werner Sinn (ifo Institute, LMU Munich) spoke about the architecture of payment systems in the euro area and the effect on central bank balance sheets in the Eurosystem. The academics attending the conference from the United Kingdom and other non-euro area countries were very interested in the questions pertaining to the institutional architecture of European Economic and Monetary Union, and debated the economic implications. On this point, Uwe Schollmeyer noted that competition between private and central bank-run payment systems is possible and even exists in practice. “However, owing to global regulatory standards, end-of-day settlement must always take place on central bank accounts,” Mr Schollmeyer stated, adding that this is also conducive to banks’ liquidity management. He observed that competition between payment systems usually exists in a small oligopoly (in most cases a duopoly).

A conference volume containing all of the presentations is to be published in the near future. It will be issued by Juan Castaneda, Director of the Institute for International Monetary Research and Senior Lecturer in Economics at the University of Buckingham. Mr Castaneda has been linked with the Bundesbank’s University of Applied Sciences since 2016, when he gave a guest lecture in Hachenburg.