Ever expanding central bank analogies from animal world: From hawks/doves/owls to pig/frog/elephant

Central banks keep looking at analogies to explain their policies and those from animal world are apt. Apart from classifying central bankers as hawks, doves and owls for their policy stances, we have policies being classified as fox vs hedgehog.

Banque De France Governor François Villeroy de Galhau introduces another classification for the three key elements of digital regulation:

The subject of innovation and digitalisation is all the more topical in light of the Covid-crisis. Many of you have been following the very ambitious UBIN project that MAS has been carrying out for the past years. You may also know that Pulau Ubin is the name of a wild and protected island in the Straits between Singapore and Malaysia. But you may not know the traditional story of how this island was created: it says that the formation of Pulau Ubin was due to a Frog, a Pig and an Elephant who challenged each other to a race from the island of Singapore to Johor across the Straits. Anyone who failed to cross would be turned into a rock. All three of them failed… But, together, they formed a new ecosystem where life and nature would thrive.

Let me elaborate a bit on each of these animals. They illustrate three key elements of digital regulation that are crucial to promoting a better ecosystem at the international level. I will start with the pig. It is a symbol of good luck and prosperity, a shield against bad fortune: this leads us to cybersecurity. Cybersecurity is a sine qua non for a reliable and sustainable digital future….


Let us move to the elephant. It has another useful talent: memory. This brings us to the issue of data protection. Financial supervisors and authorities in charge of privacy have to invent new ways of cooperation to address data issues and their interaction with financial services. We can all notice that there is a striking discrepancy between financial services being “borderless” and privacy regulations elaborated mostly at the country or regional level, reflecting differing social norms…..

I finally move to the frog. As you know, it is a strong symbol of agility and transformation – from tadpole to frog. This is exactly what financial institutions and firms need to respect competition and anti-trust rules. It is becoming an ever-greater subject in Asia, echoing similar steps that are being taken in Europe. Bringing in new players is essential to challenge existing business models, such as the granting of licenses to digital banks by MAS and other jurisdictions in Asia. We also need to make sure that similar activities and risks are addressed in the same way, regardless of the type of institution involved. Situations where “the winner takes most” while staying outside of the financial regulated scope should be adequately anticipated and avoided. We have to collaborate more closely at the international level in order to adopt the most comprehensive approach across borders and regulatory scopes.


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