Bundesbank setting up global innovation centre in Frankfurt and Paris
The Bundesbank is about to become a hub for joint digital financial innovations developed by central banks from all over the world. Together, the French central bank and the Bundesbank will set up an innovation centre at their locations in Frankfurt am Main and Paris. Both central banks will thus represent the Eurosystem as part of the Bank for International Settlements’ global “BIS Innovation Hub” network, as the BIS announced in Basel after its competition procedure had come to a close.
As the host of the Frankfurt site, we look forward to working together with central banks from all over the world to push ahead with digitalisation in the financial system”, commented Bundesbank President Jens Weidmann on the BIS’s decision. He noted that the international community of central banks should share in the Bundesbank's innovative power and benefit from its operational strength in running IT systems. In return, he hopes that partner central banks will provide an array of input for the Bundesbank’s technological development. “
We will develop target-oriented innovative solutions with a keen sense of curiosity and a great deal of creative energy. Digital central bank innovations will allow us to make the financial system of tomorrow more stable and more efficient”, the Bundesbank President explained.
Innovation key to stability
This cooperation will see the Bundesbank open up its own innovation lab in Frankfurt to international partner institutions. For several years now, the Bundesbank has been investing heavily in modern technologies such as big data and machine learning. It considers innovation to be essential to fulfilling its commitment to stability in the future as well. Innovative applications in central banking can, for example, make payments more efficient, enable real-time financial supervision and enhance cyber security. One of the key benefits of the newly agreed network is the establishment and expansion of an international digital ecosystem of central banks which can bundle applications and technologies.
Innovation centres in Europe and North America
Overall, the BIS Innovation Hub will consist of seven global nodes. The BIS will also open innovation centres together with the Bank of Canada, the Bank of England and four northern European central banks. Last year, the first three innovation centres were opened in partnership with the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Swiss National Bank. “
The “BIS Innovation Hub” is an investment in the future of central banking and the financial system”, explained Agustín Carstens, the General Manager of BIS. He added that the new centres will help to push forward global cooperation in the area of innovative financial technologies.
The BIS, also known as the “central banks’ bank”, is the world's oldest international financial institution. Membership is restricted to central banks and other comparable institutions. The Bundesbank is one of currently 60 member institutions. The aim of the BIS is to support central banks in their pursuit of monetary and financial stability. Since 2015, Bundesbank President Jens Weidmann has been Chairman of the Board of Directors, which sets out the strategic and business policy direction of the BIS.