In September, the president of the Dutch central bank wrote what may have been the most remarkable letter of his career: it said that the ECB’s interest rate hikes will lead to losses for De Nederlandsche Bank (DNB) for the first time since 1932. Several countries throughout the eurozone are facing a similar problem. To absorb the losses of their central banks, European taxpayers risk having to pay tens or even hundreds of billions of euros a year. Meanwhile private banks get that same amount of money without having to do anything in return. The ECB now stands ready to make a crucial policy decision to determine whether billions in taxpayer money will again flow to the banking sector.
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Explainable artificial intelligence (xAI) is seen as a solution to making AI systems less of a “black box”. It is essential to ensure transparency, fairness, and accountability – which are especially paramount in the financial sector. The aim of this study was a preliminary investigation of the perspectives of supervisory authorities and regulated entities regarding the application of xAI in the financial sector. Three use cases (consumer credit, credit risk, and anti-money laundering) were examined using semi-structured interviews at three banks and two supervisory authorities in the Netherlands. We found that for the investigated use cases a disparity exists between supervisory authorities and banks regarding the desired scope of explainability of AI systems. We argue that the financial sector could benefit from clear differentiation between technical AI (model) explainability requirements and explainability requirements of the broader AI system in relation to applicable laws and regulations.
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Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf outlined an alternative to the current monetary system in which banks are replaced by a peer-to-peer system to issue and transfer digital money: the Bitcoin. While Bitcoin has attracted a substantial investment volume, the system has not achieved the status of a viable alternative monetary system. However, the distributed ledger technology (DLT) underlying the payment system is being applied successfully by financial institutions and is likely to have important implications for the future of money and banking. In this paper we therefore focus on the most advanced distributed ledger application in the financial industry: R3 Corda. This paper is structured as follows. In the first section, we relate the debate about systems of money creation to the rise of Bitcoin. Next, the development of R3 Corda is discussed and the lessons learned for monetary reform. We conclude with an assessment of the scope and likelihood of monetary reform as a consequence of DLT applications by central banks.
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The guidance offered here is intended to assist social workers in thinking through the specific ethical challenges that arise whilst practising during a pandemic or other type of crisis. In crisis conditions, people who need social work services, and social workers themselves, face increased and unusual risks. These challenging conditions are further compounded by scarce or reallocated governmental and social resources. While the ethical principles underpinning social work remain unchanged by crises, unique and evolving circumstances may demand that they be prioritised differently. A decision or action that might be regarded as ethically wrong in ‘normal’ times, may be judged to be right in a time of crisis. Examples include: prioritising individual and public health considerations by restricting people’s freedom of movement; not consulting people about treatment and services; or avoiding face-to-face meetings.
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The high level of digitalization of financial products and services changed the banking landscape, leading to the emergence of digital banks, or neobanks. Despite the further advancement of digitalization and the rapidly growing customer base, many digital banks left the market just a few years after being launched. This chapter analyzes the medium-term financial performance of digital banks as a proxy measurement of their strategic success. The annual financial figures of 10 digital banks from different countries are compared with the corresponding figures of 13 traditional banks, capturing the growth-oriented loss-making features of the digital-only banking business model. The financial analysis is complemented by the four case studies, which describe the two successfully realized strategies of digital banks and the two failed strategies and derive conclusions on the factors of neobanks’ strategic success. The chapter also reviews the reasons behind the growth of digital banks and presents the neobanks’ systematic classification.
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This paper reveals how the automatising of protocols ignited a public conflict between Dutch banks and their Small and Medium-sized Enterprise (SME) clients in the years after the Global Financial Crisis. The bank’s “infirmary departments” for Financial Restructuring and Recovery (FR&R) were accused of (mal)treating SMEs. The conflict resulted in no formal regulatory or legal change despite public support. Instead, the banks created self-regulation to improve communication with SMEs, leading to shifts in governing FR&R for SMEs. This way, the banks mitigated significant negative symptoms of automation and solved the conflict with the SMEs while keeping FR&R and ongoing automation intact. The research uses an interdisciplinary analytical framework to understand national financial conflicts in a digitalised (business) world. It contributes to the theory of institutionalising values in discursive contests between action fields. The paper highlights the material and causes of normative conflicts of interest among critical actors in established public-private networks through discourse analysis and process tracing.
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Purpose: Small and medium-sized entities (SMEs) operating in the alternative financing sector are typically heterogenous in nature making them differ greatly from traditional banks. Where traditional banks must comply with strict banking regulations, developing uniform regulations for the alternative financing sector remains a challenge. This paper examines the current challenges and solutions from a sociological and institutional perspective in developing standards for SMEs operating in the alternative financing sector in the Netherlands. Adopting minimum quality standards should lead to increased transparency and public trust in the non-banking sector.
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Thesis: Ethics work (Banks 2012, 2016) is a stimulating concept for the ethical improvement of inter-professional cooperation. Outline: Starting point: ideal-typical professionalism Introduction to ethics work Professionalism requires inter-professional cooperation Inter-professional expansion of ethics work Final remarks and further challenges
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Creative SMEs are heavily focusing on the creating process designing new products and services. Consequently, their managers tend to loose contact with crucial management issues. Especially their knowledge of the financial aspects of their business can be so limited that they fail to connect with the financial viability of their business, which can lead to serious business problems. This paper draws on a number of studies that examine the role of outsiders -contracted professional service providers- in relation to business success of SMEs. In the light of the potential growth of Flemish creative SMEs on international markets the question can be raised as to what extent outsiders, and more specifically financial service providers like accountants and banks, contribute to the export success of these firms. In this paper therefore the role played by accountants and banks was explored to solve export-related questions by small furniture designers in Flanders, Belgium. Export can be considered as the most successful growth and therefore raises interesting management issues for creative SMEs. Little is known about the content and intensity of services of accountants and bank employees in relation to export-related questions of owner-managers of small creative firms. In order to examine the fit between supply and demand the focus is on outsider contribution during six phases of export.
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In mijn promotieonderzoek heb ik mij gericht op het identificeren van inspiratiebronnen voor profes-sionalisering in de vorm van persona’s, die ik beelden van de professional heb genoemd (De Jonge, 2015). Mijn aanvankelijk plan was om deze bronnen vruchtbaar te maken voor professionaliserings-trajecten, maar mijn promotor stelde een andere richting voor. Voorbeelden van zulke beelden zijn de reflectieve praktijkwerker (Schön, 1983), de presentiebeoefenaar (Baart, 2001), de intrapreneur (Pin-chot, 1985) en de democratische professional (Dzur, 2008). De normatieve professional (Kunneman, 1996) is een beeld dat ik in mijn promotieonderzoek heb opgenomen. Later heb ik betoogd dat ook de muzische professional (Van Rosmalen, 1996) zo’n inspirerend beeld is (De Jonge, 2019b). Dit postdoc-onderzoek kan worden opgevat als een zoektocht om de inspiratie van de normatieve professional en de muzische professional op praktische wijze met elkaar te verbinden tot wat ik – in navolging van Banks’ (2016) concept van ‘ethics work’ – muzisch ethiekwerk heb genoemd. Dit schilderij van mijn vrouw associeerde ik met de dappere en moeizame pogingen van professionals om zich op de juiste wijzen te verhouden tot de complexe contexten waarin zij opereren. Ik gebruikte het voor het omslag van mijn dissertatie. Dit onderzoeksrapport is het verslag van een verkennend postdoc onderzoek naar de potentiële meer-waarde van de theatrale dialoog als ethische interventie voor sociale professionals. De theatrale dia-loog is een muzische werkvorm die ontwikkeld is door Bart van Rosmalen (1996). De kern ervan is dat twee personen in een woordeloze interactie om beurten houdingen of posities ten opzichte van elkaar innemen. In deze verkenning is onderzocht of deze non-verbale werkvorm behulpzaam kan zijn om ethische vraagstukken van sociale professionals te verhelderen. Hierbij is gebleken dat deze interven-tie het ethisch actorschap (Keinemans, De Jonge & Kloppenburg, 2014) van professionals stimuleert, hen aanzet tot ethiekwerk (Banks, 2016). De professionals die aan het onderzoek hebben deelgeno-men, hebben naar eigen zeggen de meerwaarde van deze muzische interventie ervaren. De theatrale dialoog als een vorm van muzische professionalisering bezit dan ook de potentie om de ethische pro-fessionalisering van sociale professionals te bevorderen.
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