New Money Review podcast

The UK's company formation process is fast, easy and cheap. The net result of being open to almost any business is that up to half the companies on the UK's Companies House register may have no legitimate purpose. Instead, those companies are used by fraudsters as a vital tool in scams and money laundering schemes. Many are set up using fake identities and addresses. Often, they break the reporting rules and never file accounts. And Companies House has become a honeypot for organised crime groups from around the world.In the latest episode of the Unseen Money podcast, Timur Yunusov and I are joined by dark money expert Graham Barrow, who has exposed some of the worst failings of the UK's company formation regime.Belatedly, the UK government is acting to address those failings. But will new legislation go far and fast enough? Listen to the podcast to find out.

In the latest episode of Unseen Money, Timur Yunusov and Paul Amery talk about the role of QR codes in scams and whether these popular barcodes may lull users into a false sense of security.Also in this episode:team Trump's Yemen fiasco, Signal and Telegramhow scammers can mass-blast SMS phishing messagesbrowser-within-browser attacks and their possible use in scamswhy the trend of limiting bank compensation to scam victims was inevitable

There's a big security loophole affecting plastic payment cards—called a replay (or pre-play) attack. Banks have known about this loophole for years. But they may still blame you, the victim, if a scammer makes use of it.In a 2022 fraud, a former British soldier holidaying in Brazil found that £20,000 had been charged to his bank card in eighteen separate transactions. The ex-soldier, Henry Williams, said he'd only used his card once and that most of the money had been taken from his account without his knowledge.His bank, a well-known British high street name, initially refused to compensate him, arguing he must have authorised all the payments. Only a year later did the bank agree to refund him—partially and with a grudging apology.Even after one of the UK's best-known security experts intervened on behalf of the victim, the UK's financial ombudsman, which is supposed to settle complaints between consumers and financial services businesses, sided more with the bank.How does a replay attack occur? Most plastic debit (or credit) cards contain a chip which is used to identify and authenticate the user. The chip comes into action when the user taps the card on a contactless payment terminal (or inserts the card into the terminal and then enters a PIN code).At this point, the payment terminal generates a number that is supposed to be unpredictable, ensuring that each payment transaction is a fresh one. Unfortunately, payment terminals can be tampered with and the supposedly unguessable number can be manipulated. This opens the door to replay attacks—and to more paydays for criminals.As many as half of all payment cards and half of all terminals may be vulnerable to exploitation, says my Unseen Money co-host Timur Yunusov, who demonstrates a card replay attack in this YouTube video.In the latest episode of Unseen Money from New Money Review, we explore replay attacks: how they occur, why the vulnerability is still there more than a decade after it was exposed, and why the payments industry is so reluctant to address the issue.

 We all now use one-time passcodes (OTPs) to verify our identity online.In the last few weeks, I've personally received OTPs from Amazon, Apple, Google, the UK Driving Licence Authority, my pension provider, payments app Yotta, National Savings and parking app Ringgo. Some OTPs were sent to me in text (SMS) messages, others arrived via email.Identity authentication online using OTPs is much safer than using a single piece of information like a password. But OTPs are not safe, for a number of reasons.In the latest episode of “Unseen Money” from New Money Review, security researcher Timur Yunusov and I discuss some recent scams that involved stolen OTPs—from a $2m theft from the family of a Moscow teenager to an industrial-scale carding operation in China.Our story covers the security of mobile networks, tech giants Apple and Google, the business models of criminal masterminds and bagfuls of stolen phones shipped around the world.

The UK prides itself in being open for innovative tech firms—and companies in general—to set up business. It takes only £12—and 15-20 minutes—to create a new company online.But the laxity of the country's system for new company formations has made the UK a goldmine for scammers. And the problem is getting worse: fraud, much of it digital, now accounts for over 40 per cent of all recorded crime in England and WalesIn the latest episode of Unseen Money, Timur Yunusov and I discuss a recent Financial Times article about a London-based fraud victim, Livia Giuggioli Firth, who was conned by scammers into sending £325k from her company's bank account. Instead of asking for compensation from her own bank for being a victim of an authorised push payment fraud, Ms. Giuggioli Firth took the unusual step of suing the scammers' bank in court. This forced the disclosure of the names if not of the individual scammers, but of the network of companies they used to launder the stolen money.The court case unveiled some of the principal weaknesses in the UK's system for deterring and catching fraudsters.In the podcast, we discuss:Why the UK is a heaven for digital fraudstersWhy Companies House is still making it easy for criminalsHow the fintech and AI booms have fuelled scamsWho's responsible in the UK for fighting scammers?How criminals second-guess anti-fraud systems and the need for ongoing due diligenceThe role of cryptocurrency in laundering stolen moneyShould Zuckerberg and Musk reimburse digital fraud victims?Why AI-enabled scams are certain to become more dangerousWant to join Timur and me on a future episode of Unseen Money to talk about how scammers use Companies House registrations to aid their crimes? Drop me a line at paul@newmoneyreview.com.

Having your identity stolen is a catastrophe. You can lose your reputation, your credit rating, your money, your home or even be accused of fraud yourself.To victims, ID theft feels like a single, earth-shattering event. But it's likely that the hacker has been stealing different aspects of your identity over time.Your name, address, email address, phone number, bank account number, passport number, medical records and log-in credentials are all valuable bits of information to hackers. Combined, they may be enough for a digital hit on you and your bank account.In the latest Unseen Money podcast, Timur Yunusov and I explore the “personally identifiable information” or “PII” that enables hackers to impersonate and rob us.PII is now traded amongst fraudsters as a commodity. But what kind is most valuable to criminals? Where do they get it? How do they use it in scams? Once we've lost our PII, is there anything we can do?Listen on for more.

In the latest episode of Unseen Money, Timur Yunusov and I discuss how to stop a bad dream turning into a real nightmare: when a phone snatcher has your mobile device and is trying to get hold of your money as well. We cover: How a phone thief can access your bank accountsThe security of contract and non-contract mobile phonesBest mobile phone security practices and what to keep safe at all costsMulti-factor authentication and avoiding single points of failureStopping a phone theft from becoming identity theftFace ID or touch ID to authorise payments?The unevenness of payment apps' securityWhy little can stop the determined hackerWe also refer to these New Money Review articles in the podcast:A phone grabber could drain your bank account in minutesHow safe are payment cards?

In the latest episode of Unseen Money, we talk about the recent $4.5 million fraud committed against Ol'ga Serova, a 71-year-old former bureaucrat from Samara, Russia. We discuss:KGB legacy: how Russian scammers play on people's long-standing fear of the authoritiesGreed, fear and social engineering by country: how the weak points of fraud victims vary in Russia, the US and EuropeBig brother in Singapore: new state powers to freeze the bank accounts of potential fraud victimsAML, KYC and Timur's past struggles to receive his salary into a UK bank accountFintechs fail: the knock-on effects from the UK's new compensation rules for victims of authorised push payment fraudWill new in-app communication channels help prevent payment scams?Why small, iterative changes in anti-fraud technology are bestSurvival of the fittest: why the weakest and least secure payments firms must go under.

Last week UK prime minister Keir Starmer said artificial intelligence could help fix potholes, teach our kids and slash the cost of public services.What he failed to mention is that AI is also a dream come true for scammers. Listen to the latest episode of Unseen Money as Paul Amery and Timur Yunusov discuss how AI-enabled fraud is rocketing and why. 

This is Unseen Money from New Money Review.I'm Paul Amery and I'm joined by my co-host, security researcher Timur Yunusov.Unseen money is our journey into the darker corners of digital payments.For many of us, transferring money is now faster and easier than ever before. It takes a couple of swipes on a smartphone.But with digital payments have come many new opportunities for criminals.Perhaps you've suffered from a phishing attack, an ID theft or a cryptocurrency scam.Maybe an online purchase went wrong, but you're not sure how.We're here to investigate—and to report to you in non-technical language.In this episode of the podcast, Timur and I discuss the UK's new rules for compensating people who've been tricked into transferring money to criminals.Have the rules deterred the scammers? Or have they just moved on to another type of payment fraud? Listen on for more.

The latest New Money Review podcast focuses on Trump, tariffs, deglobalisation and the currency markets. My guest, Mark Astley, is a former colleague, a currency and fixed income specialist who recently retired as chief executive of asset manager Millennium Global Investments. “We are living in an epochal time in the history of exchange rates and trade policy,” Astley says in the podcast.During the recording, Astley suggests the 53-year experiment with a dollar-based floating exchange rate system may be coming to an end—and he suggests that tariff wars and rising geopolitical turmoil may bring an end to dollar dominance as well.Listen in for a 30-minute discussion of the backdrop and outlook for global currencies. We cover:The benefits and costs of post-1971 exchange rate flexibilityThe great disinflation of 1981-2021 and the recent return to higher inflationTrump, tariffs, supply chains and interest ratesWhich global economies are least and most exposed to a trade war?Why dollar dominance may end slowly, then suddenlyThe breakdown of post-WW2 global institutionsImplications for currency markets, precious metals and cryptocurrencies

In the last decade, the way we make our payments has become more seamless, faster and cheaper. We've switched from signatures on paper cheques to a few swipes and a tap on a mobile phone.But with these advances have come massive new opportunities for cybercriminals.From cons using deception and social engineering to romance fraud, unauthorised transfers, hacks and identity theft, the cat and mouse game between scammers and those policing the payments system has now reached a new level of intensity. In the latest New Money Review podcast I'm joined to discuss this topic by Steven Murdoch, professor of security engineering at University College, London.During the podcast, we cover:Why technologists, lawyers and economists all focus on payments securityHow should we treat victims of payments fraud?Why tricking customers into transferring funds is now the most lucrative payments scamHow limits on customer reimbursement may cause banks to stop pursuing fraudstersBalancing responsibilities in customer reimbursement schemesHow AI may help payments fraudsters cast a wider netHow the parameters of banks' online payments systems can feed or starve fraudDoes more secure always mean harder to use?Cross-border fraud and the reversibility of paymentsCryptocurrency from the perspective of payments securityTelegram and tensions over encrypted messaging networksThe Horizon scandal and the legal presumption of reliable IT systems

When, why and how do countries go bust? That's the topic of the latest New Money Review podcast, where I'm joined by Greg Makoff, a former physicist, banker, government advisor and now senior fellow at the Harvard Kennedy School.Makoff is the author of a recent book on what has been called “the most contentious default in history”—Argentina's 2001-2016 debt restructuring.In the podcast, we discuss:When, why and how countries go bustWhat distinguishes a sovereign insolvency from a corporate or personal bankruptcyWho has jurisdiction over sovereign defaults?What brings governments and creditors to the table?Sovereign immunity and the negotiating power between debtor and creditorWhat went wrong in Argentina's debt restructuring?How Elliott Capital Management made billions on defaulted Argentinian debtThe broader public policy lessons of Argentina's debt restructuringChina, the IMF and the geopolitics of sovereign debtDefault risk in domestic and foreign currency bondsWhy sovereign debt problems will never go away

Supporters of the $10trn private equity industry say it fuels economic growth and delivers leaner, better-performing companies.One leading critic of the sector is Ludovic Phalippou, who says that the industry routinely overstates its financial performance. And, he says, private equity funds charge a whopping 6-7% a year in fees, wiping out any potential benefits to investors.In the latest New Money Review podcast, I interview Phalippou, who is professor of financial economics at Oxford University. We cover:What is private equity?How big is the private equity market?Why have private equity assets grown fivefold in a decade?What is the economic footprint of private equity?How should we measure private equity funds' performance?How honest are private equity firms in reporting performance?Do private equity funds have higher returns than public equity funds?What do private equity funds cost?Agency conflicts in the private equity industryThe impact of recent interest rate rises on private equityThe need for standardised reporting of private equity performance.

Want to know what happens when fraud is a core component of your business model?Want to know how a business idea described as an “economic fairytale” could be valued at $300m? Want to know how an unknown cryptocurrency exchange could end up with a $1bn a year marketing budget, rivalling that of Microsoft?Want to know how easy it is to corrupt auditors and journalists with crypto tokens?All this is in Crypto Confidential, a new book by Jake Donoghue that's coming out in August 2024. I read a review copy, really enjoyed it and have invited Jake to talk to New Money Review podcast listeners.Donoghue describes his book as “a record of the sheer extravagance, excess and absurdity I bore witness to on a daily basis”.In the podcast we discuss:How an unviable betting start-up could be worth $300m on its first day of tradingWhy its founders switched focus from gambling to marketingDuplicitous tactics, shilling, pumping and dumping in cryptoThe confluence of politics and cryptocurrencyWhy did the cryptocurrency markets recover after the 2022 FTX/Terra/Luna frauds?From bitcoin to ICOs, NFTs and memecoins: how crypto has lost touch with its originsHow influencer crypto marketing hit its peak in 2022When Bybit's reported $1bn a year marketing budget rivalled Microsoft'sThe innovation of crypto fundraisingWhy crypto journalism is an oxymoronTether and sanctions evasionWhy crypto projects are jumping onto the AI bandwagonWhat next for cryptocurrency?

In the latest New Money Review podcast, I interview Richard Comotto, a specialist in repo, the multi-trillion dollar marketplace used by large financial institutions to borrow and lend money in the short term.Richard, who started his career at the Bank of England, works for the International Capital Markets Association (ICMA), for whom he has authored the ICMA “Guide to Best Practice in the European Repo Market”, its website FAQs on repo and the semi-annual survey of the ICMA European repo market, which has been running since 2000. He has also advised on the development of domestic money and repo markets for bodies such as the Asian Development Bank, the International Monetary Fund and the World Bank. He is also co-founder and chief product officer at London Reporting House, a fintech providing data and analytics on the repo market.In the podcast, we cover:What is the repo market?The role of repo in the bond marketsDid repo help trigger the 2008 financial crisis?The difference between repo and a pledgeThe difference between repo and a securities loanWhy repo has largely replaced unsecured wholesale lendingWhen and how can repo go wrong?How do central banks use repo?Is quantitative tightening (QT) the reverse of quantitative easing (QE)?The effect of blockchain on the repo marketHow shorter settlement cycles affect repoCould central clearing trigger a repo market accident?

The Stoic philosophers said we should manage our emotions when it comes to money and wealth.But is this a realistic goal? How can we resist the siren call of riches? How can we persevere and stay positive through tough economic times?In this episode of the New Money Review podcast I'm joined by Donald Robertson, philosopher, psychotherapist and author of best-selling books on how to apply Stoic principles to modern life.In the podcast, we cover:Who were the Stoics?Why have we turned repeatedly to them over the centuries?What explains the latest surge of interest in their ideas?Stoicism and stoicismWhy the former is good and the latter is bad for your mental healthHow Marcus Aurelius's meditations speak to all of usThe Stoics' sophisticated understanding of emotionsWhy strong emotions cause cognitive biasesWhy we are blind to our own biasesStoic practices and modern methods of cognitive distancingStoic beliefs on wealth and moneyWere the early Stoics communists?How the Stoics could save democracy

Almost half of the crime now committed in the UK is now fraud, most of it taking place online. But only 1% of police resources are devoted to catching the fraudsters.In the last New Money Review podcast I looked into how to bridge this alarming gap, exploring the mindset of the cybercriminal with my guest Sarah Armstrong-Smith.In this episode I dig into a small, but disturbing and rapidly growing part of the multi-trillion electronic crime business—romance fraud.My guest is Dr Elisabeth Carter, a criminologist and forensic linguist who works at the intersection of language and the law. She's recently published a book in which she shows how criminal gangs exploit language to lure and then cheat their victims.Romance fraudsters exploit psychological weak points as well, making it look as if they are on the victims' side. As a result, when the fraud is exposed, the victim suffers both monetary and psychological harm. Even worse, the rest of us then often blame the victims, says Carter.Listen in for the next 30 minutes to learn more—and how best to protect yourself.We cover:Why a romance fraud often seems normal at the beginningHow fraudsters harness the contextWhy a fraudster invites protective responses from the victimSecrecy, isolation and urgency—trademarks of the crimeWhy romance fraud is a long conWhy fraudsters give giftsCoercive control--the psychological harms of romance fraudHow a romance fraud may escalate to physical threatsNegligence or abuse—should banks compensate fraud victims?

Cybercrime is often more than just a demonstration of hacking skills. The attacker could be motivated by money, but equally by nationalism, a search for notoriety or revenge. The victim may be random and innocent, but he/she could have been singled out because of an emotional weak spot. Following the crime, other human emotions, such as guilt or shame, may prevent the attack from being disclosed.So when addressing cybercrime, we need to focus as much on psychology as on technology. As internet-enabled fraud reaches ever more alarming proportions, in the latest New Money Review podcast I interview Sarah Armstrong-Smith, author of a new book called “Understand the Cyber Attacker Mindset”.In the podcast, we cover:Why pandemics and war are great news for fraudstersThe amplification effect of social mediaHow disinformation campaigns drive polarisation in societyWhy nation-state hackers are well-resourced and focusedWhy cybercrime and fraud are the invisible crimeHow police forces are scrambling to catch up"Pig-butchering": blaming the victims of fraudSeeing frauds as human-to-human relationshipsBolstering our defences as organisations and individualsThe need for transparency about cyberattacksWhy sanctions are most effective at the individual level

We need a new approach to building trust in economic and monetary systems, says Ian Grigg, my guest on the latest episode of the New Money Review podcast.Grigg, a computer scientist and cryptographer, is one of the pioneers of internet-based money. In the 1990s, he worked on digital cash systems, which applied strong cryptography systems to money transfers. Grigg also published articles on shared ledgers, triple-entry accounting, proof-of-work systems, smart contracts and social reputation systems well before the emergence of bitcoin.In the podcast, Grigg talks about the ballooning problems of financial exclusion, money laundering and financial crime. He argues that the current US-driven approach to isolating bad actors and excluding them from the financial system is bound to fail.Instead, says Grigg, we need to focus on rebuilding identity and money systems from the ground up, using models found in countries where trust in governments and financial institutions is largely absent.To listen to the podcast, click here. In it, we cover:How the cypherpunks became interested in digital moneyWhy Satoshi Nakamoto was a cryptographer, not a cypherpunkWhy strong cryptography caused a revolution in accountingThe prospects for triple-entry accountingWhy state identity systems cannot fulfil humans' need for trustHow community money can fill the trust gapThe ballooning costs and falling returns of banks' compliance effortsWhy anti-money-laundering (AML) and know-your-customer (KYC) rules have failedThe problem of false positives in AML monitoringWhy governments cannot beat the money launderers—the OODA loopBuilding virtuous circles of trust—in communities, countries and globally 

In the latest episode of the New Money Review podcast I'm joined by someone who says we're in the middle of a historic battle between the public and private sector over money. And it's one the state can't afford to lose, he argues. Our future global money will be digital, cheap and mobile, says Richard Holden, professor of economics at the University of New South Wales, Sydney, Australia, but it may be issued by a tech giant or an emerging economy rather than the Federal Reserve, European Central Bank or Bank of England. And that right to issue money will confer massive power on the winner of the digital currency race.In his new book, “Money In the 21st Century”, Holden makes a passionate defence of state money and says the US central bank should get its act together and start issuing its own digital money, which he calls Fedcoin.In the podcast, we cover:Why should we go cashless?What about those who rely on physical cash?How should we go cashless?Why is it a problem if a private currency wins the digital currency race?Why should the US issue a “Fedcoin”?Aren't faster payment systems enough?What did we learn from Facebook's digital currency experiment?China, the US and the geopolitics of digital moneyThe future role of the banking system

In the latest episode of the New Money Review podcast I'm delighted to welcome Satyajit Das, a former investment banker, derivatives expert and author.His book “Traders, Guns and Money”, published in 2006, remains one of the best books ever written about the world of high finance.It's been called “a wickedly comic exposé of the culture, games and pure deceptions played out every day in trading rooms around the world. And played out with other people's money.”Das went on to publish “Extreme Money” and “The Age of Stagnation”, in which a common theme is the high global levels of debt.In the podcast, Das talks in detail about debt and the complexities of measuring it. He says all financial markets are now at risk from excessive leverage. Japan, whose currency has recently undergone a big devaluation, may point the way ahead for all of us, he says.We discuss:Why debt is like heroinHow the marginal productivity of debt has been fallingReaching the “trust moment” in government bond marketsHow vulnerable are US Treasuries to a liquidity crisis?Why inflation may be higher for longer……and interest rates could overshoot expectationsDebt on debt and the challenge of understanding leverageHow tech entrepreneurs borrow against equityComplexities in leverage chains—the example of GreensillWhy non-bank financing of debt is particularly riskyWhy regulators struggle to monitor shadow banksCross-border exposures in the Evergrande bankruptcyWhy the “usual disinfectants”—better disclosure and more capital—no longer workHow Japan finally escaped its debt trapWhy sovereign wealth funds are buying up global infrastructureThe end of financial engineering

Excitement over the prospects for artificial intelligence (AI) has driven US stock market valuations to a historic high. Can AI technologies deliver on their promise? Or is this yet another case of irrational exuberance?In the latest New Money Review podcast I am joined by Eric Siegel, a former Columbia University professor who has taught computer science courses in machine learning and AI. Siegel, now a consultant, has just published a new book called “The AI Playbook—Mastering the Rare Art of Machine Learning Deployment”.In the podcast, we explore some of the paradoxes surrounding AI: why this tech tool with apparently unlimited greatest promise may be the hardest to use, and why computers promising us greater autonomy may in fact require more supervision.We cover:What is artificial intelligence (AI) and what is machine learning (ML)?What is generative AI?What explains the current AI hype?How predictive analytics can improve organisations' performanceExamples of successful machine learning in practice: UPS and credit scoringWhy do so many ML projects fail to reach deployment?Why artificial general intelligence (AGI) is “the most compelling ghost story ever”Why computers that seem more human-like may give us less autonomyWhat goals can ChatGPT reach and where does it fall short?Why AI hype may be costly 

Against an uncertain economic backdrop, one industry is booming.Internet fraudsters are scamming more and more victims worldwide. Using increasingly sophisticated methods, they are now stealing even from the most prepared among us.But while the number of online frauds and the volumes of money involved are increasing, so are the efforts to stop scammers.In the latest New Money Review podcast, I'm joined by Simon Miller, director of policy and communications at Stop Scams UK.In the podcast, we discuss:Why the volumes of scams and the money lost are significantly underreportedHow scammers target our insecurities and vulnerabilitiesWhy scams have shot up governments' policy agendasWhy cross-sector data sharing can help prevent scamsShould all scam victims get their money back?Who should compensate scam victims—banks, tech firms or telecoms?Why fraudsters like digital paymentsWhy fintechs face higher compliance costsWhy combating scams requires global coordinationWhy artificial intelligence (AI) is both bad and good newsThe trade-off between privacy and fraud preventionHow to reduce the chances of being scammedWhy the Israel-Gaza war will drive new charity scams

If you thought tax was boring, the latest New Money Review podcast will change your mind.Dan Neidle was a top corporate lawyer for 23 years—ending up as head of tax at London law firm Clifford Chance. But in 2022 he retired to set up a new think tank called Tax Policy Associates. Its aim is to improve UK tax policy and to improve the public understanding of the subject. This nerdish-sounding mission statement gave no indication of the political fireworks Neidle's new venture was shortly to ignite. In July 2022, he accused then-Chancellor Nadim Zahawi of having avoided £4m in capital gains tax a few years earlier. It later emerged that Zahawi was under investigation by his own subordinates in His Majesty's Revenue and Customs (HMRC), as well as being the subject of a separate inquiry the National Crime Agency (NCA).Other campaigners had tried to expose Zahawi in previous years but had been put off by threats of legal action—the UK's infamous ‘strategic lawsuits against public participation' (SLAPPs), which often silence investigative journalists.But when Neidle received similar threats from Zahawi's lawyers he called the UK Chancellor's bluff. He went ahead and published his investigations. Zahawi was forced to back down.In September 2022, incoming UK prime minister Liz Truss replaced Zahawi as Chancellor and gave him another ministerial position. But in January 2023, Rishi Sunak, who had replaced Truss in October, fired Zahawi from the UK government. Citing the tax investigation which Neidle had been instrumental in bringing to light, Sunak said Zahawi had committed ‘a serious breach of the Ministerial Code'.Tax Policy Associates' more recent investigations touch on such sensitive topics as UK inheritance tax, the ‘carried interest' tax exemption enjoyed by private equity firms and the alleged involvement of the family of another Conservative politician, Michelle Mone, in a cover-up relating to government contracts for personal protective equipment (PPE) during the coronavirus pandemic. In the half-hour podcast discussion, I quiz Dan Neidle on a number of tax-related topics, including:Separating the goals of tax policy from the tax rulesWhether the complexity of tax codes aids illicit behaviourWhy the make-up of UK tax revenues has changed remarkably little over timeWhy the Liz Truss tax-cutting experiment went wrongThree ideas to improve UK tax policy (value-added tax, income tax and land tax)PPE contract fraudFailures in the UK's system of corporate transparencyWhy Companies House is a giant fraud robotWhy the UK remains a spectacularly successful venue for money launderingCoordinating the taxation of multinationalsWhy we should encourage the OECD's ‘Pillar 2' project

Financial markets go up and down. And they usually fall faster than they rise.But when does normal financial market turbulence tip over into a systemic collapse? How should policymakers prepare and how should they react?In the latest New Money Review podcast, I interview Steven Kelly, associate director of research at the Yale Programme on Financial Stability. The programme's mission is to create, disseminate and preserve knowledge about financial crises.In the podcast, we cover:What defines a systemic financial crisis?The common threads of financial crisesDeposits, short-term debt and bank runsThe historic scale of the 2023 US bank failuresHow safe is the global banking system?Safe assets, repo and US TreasuriesThe impact of rising interest rates on financial stabilityThe risks in stablecoinsSustainability, ESG and climate riskWhy current conditions are ‘stable but fragile'

In the latest episode of the New Money Review podcast I'm delighted to welcome Tim Congdon, an economist and leading advocate of monetarism.After a successful career in the City, Tim became founder and chair of the Institute of International Monetary Research at the University of Buckingham.I've followed his work for over three decades. In the early 1990s, when I was working as a bond fund manager, the UK's central bank was keeping interest rates at over 10% in an attempt to make sterling shadow the deutsche mark.Tim forecast that UK interest rates would soon fall from double figures, based on sluggish money supply growth that, in his view, meant a recession was coming.In the end, the Bank of England had to abandon its exchange rate target, sterling rates fell sharply and—as I had followed Tim's advice rather than the consensus view—my fixed income clients did very well.Now we seem to be repeating the same, or at least a similar story. Listen to the podcast for more. In this episode, we discuss:Why Congdon became a monetaristHow money supply figures gave advanced warning of inflation in early 2020Why central bankers' interest-rate-only macroeconomics is wrongWhy we should assess central bankers' performance against money supply targetsWhy quantitative easing was necessary in 2008/09Why low money supply growth now presages a recessionWhy we will soon see falling interest ratesWhy the basic principles of monetarism are common senseHow money supply targeting could help dampen boom/bust cyclesWhy CBDCs could affect the way we measure money

We often look at colonial empires as territories gained and occupied by nation states. But across four centuries, colonialism has above all been the business of companies, says my interviewee in the latest New Money Review podcast.Philip Stern is the author of a new book called ‘Empire, Incorporated', in which he explores the role of the company in British colonial history.In it, he argues that corporations conceived, promoted, financed, and governed overseas expansion, making claims over territory and peoples while ensuring that British and colonial society were also invested, quite literally, in their ventures. Colonial companies were also relentlessly controversial, frequently in debt and prone to failure, says Stern.Like empire itself, says Stern, the joint-stock company was an elusive contradiction: it was both public and private; person and society; subordinate and autonomous; centralised and diffuse; immortal and precarious; national and cosmopolitan—it was a legal fiction with very real power.In the podcast, we cover:How private enterprise fuelled the growth of the British empireWhy the joint stock corporation underpinned colonial expansionThe political and legal advantages of the corporationWhy the 16th century saw an explosion in adventuring and speculationWhy many US states were formed as chartered corporationsHow the East India Company became the first ‘company-state'Why the 1880s/1890s ‘scramble for Africa' followed corporate modelsTech giants and new virtual empiresNatural resources, private military companies and today's geopolitics

Tim Yunusov is hacker with a special interest in banking and payment systems. He's also written a series of articles on hacking for New Money Review.He's been hired by financial institutions to see if he could breach their online banking systems and mobile apps, their card payment systems or their automated teller machines (ATMs).In many cases he could. In 2019, for example, he showed how to get around the limit on contactless card payments (£30 at the time in the UK) by altering the information exchanged by the contactless device and the card reader.In a more recent case, Tim went around UK petrol stations using cryptocurrency-based payment cards and found he could refuel for free.Tim has also written articles on faking digital identity, how to steal money from buy-now-pay-later (BNPL) schemes and whether someone in possession of your mobile phone can drain your bank account (spoiler: the answer is yes).His article on BNPL fraud didn't go down well with one of the main lenders, who complained to me by email that it was “a step-by-step guide that will encourage criminals further in their activity of stealing money from consumers”.I responded that Tim was showing BNPL's security flaws in the public's interest.But there's clearly a fine line between ethical hacking and breaching systems with malicious intent. So I asked Tim onto the New Money Review podcast to talk more about his work. In the podcast, we discuss:Why cybercriminals love cards and paymentsWhy every new technology comes with its own security risksWhy the US and Latin America are honeypots for payments fraudstersWhy ransomware led to a boom in cybercrimeWhy fintechs and crypto firms are more prone to fraud than banksWhy combining crypto and payment card technology created security risksThe global divergence in payments systemsFake IDs and the future of hackingHow to stay safe when making digital payments

In this episode I'm joined by Kyle Gibson, a senior staff researcher and writer at the Massachusetts Institute of Technology's Open Learning initiative.I've been following Kyle on Twitter for years, where he has been a consistently funny and well-informed critic of the crazy world of cryptocurrency.Today he joins the podcast to talk about another tech utopia that's in the headlines: artificial intelligence or ‘AI'.Are the claims made for AI overblown? How are AI models developed? What human inputs are required? Who funds AI? What's the link between AI and cryptocurrency? Can cryptocurrency fix AI? And what's AI got to do with geopolitics?Listen in for the next thirty minutes to hear more.

2023 has been a year of bank runs, most notably in the US. What's going on? And how should we invest in response?In the latest New Money Review podcast, I talk money, credit, banking and markets with Alex Gloy, founder and chief executive of Lighthouse Investment Management.Listen in to hear us discuss:What is money?The role of credit in the monetary systemInterest and the sustainability of debtWhy a bitcoin-based monetary system can't workDigital bank runs and the stability of banksShould governments underwrite all bank deposits?Why markets believe interest rates have peakedHow Facebook jump-started central bank digital currencies (CBDC)Why central banks are walking a tightrope with CBDCWhy investors should prefer real assets to bonds

Former banker Sean Tuffy tracks the impact of global financial regulation on the investment business. In recent years he's been paying a lot of attention to cryptocurrencies, digital assets and tokenisation. In the latest New Money Review podcast we cover:How the FTX collapse will impact financial regulationWhy the US is playing catch-up over crypto rulesComparing the Bankman-Fried and Madoff fraudsWhy crypto bankruptcies are so complexShould we regulate crypto or let it burn?Why the EU is a test case for crypto regulationStablecoins, money market funds and regulatory arbitrageCrypto FOMO and the regulatory perimeter

Since the coronavirus pandemic, many of us have switched from paying by cash to paying almost exclusively by card or digital wallet.My guest on the latest New Money Review podcast is someone who argues that, contrary to the mainstream narrative, the boom in digital payments hasn't benefited either businesses or consumers.Management consultant Bob Lyddon says that UK payments have become the domain of a technocratic elite, which is working in tandem with big tech firms and the major payment card brands.According to Lyddon , digital payments have enabled a new kind of fraud, taken an increasing cut of businesses' revenue and made the use of cash increasingly difficult. If the UK goes down the road of introducing a central bank digital currency (CBDC)—as most people expect—consumers could suffer further, says Lyddon, while the Bank of England and tech company insiders will become even more powerful.It's time to derail the digital payments boom, says Lyddon. Consumers can fight back by paying in cash and dealing only with local businesses.Listen to the podcast to hear more on:How the UK payments industry got round regulations capping intermediaries' feesWhy digital payments cost businesses up to 7% of the face value of salesHow faster payments have enabled authorised push payments fraud (APPF)Why consumer protections in digital payments are inadequateHow Open Banking failed to achieve its main objective—account switchingWhat explains Rishi Sunak's enthusiasm for fintech and cryptoassetsWhy the “Britcoin” (UK CBDC) project is shot through with vested interestsThe bypassing of democratic process in the digitisation of moneyThe flaws in the e-money “safeguarding” regime for client funds

It's been a torrid year for investors in cryptocurrency but the worst is not over, says Carol Alexander, my guest on the latest New Money Review podcast.In 2023 the crash will shift to decentralised finance (DeFi), predicts Alexander. DeFi, she argues in the podcast, is repeating the mistakes of the centralised crypto lending schemes—like BlockFi, Celsius and Voyager—that faltered this year. And DeFi's “magic money tree” is bound to fail in the same way, she says.Alexander is professor of finance at the University of Sussex. Now focusing in her work primarily on crypto markets, she has worked in financial risk management, in mathematical finance and as an econometrician. She also blogs regularly on crypto, digital money and quantitative finance.In the podcast we discuss:The role of clearing, custody, margin finance and insurance funds at crypto exchangesWhy Alameda's exemption from FTX's liquidation algorithm was a big dealWhy retail investors shouldn't trade on crypto exchangesWhy crypto exchanges are rigged to benefit professional tradersWhy “proofs of reserves” at crypto exchanges are worthlessWhy crypto exchange audits require stress tests and operational checksWhy DeFi will be the focus of the crypto crash of 2023Staking as a service, yield farming and the magic money tree of DeFiWhy Tether is so dangerousHow Tether and Binance are dollarising the worldWhy Tether and Binance may fight a stablecoin war

An auditor verifies the accuracy of a company's financial records. He or she is supposed to spot any material misstatements, including those due to fraud or errors.And yet in two of the largest financial frauds in history—the 2021 collapse of German payment firm Wirecard and the recent bankruptcy of crypto exchange FTX—auditors had placed a stamp of approval on the companies' accounts.How did they get things so badly wrong?To find out how audits can mislead I'm joined on the latest New Money Review podcast by Francine McKenna.Francine has worked for many years as an auditor and columnist writing about accountancy. She is currently a lecturer on accounting at the University of Pennsylvania's Wharton Business School.Listen to the podcast to hear us discuss:What happened at FTXWhy FTX's audit practices raised red flagsThe dangers of related party transactionsThe Tether and Circle stablecoinsWhy the 2002 Sarbanes-Oxley Act failed to stamp out corporate fraudRegulatory capture and political corruptionWhy audit is a process, not a testHow investors can protect themselves

We are living in the golden age of fraud.But we're also in a golden age for data leaks.In the last six years we've seen a cascade of information from places like Panama, Switzerland and Dubai—these are countries where lawyers, accountants and bankers promise secrecy while serving the rich and powerful. The tens of millions of leaked documents have helped shine light on the financial affairs of the wealthy and well-connected. But they've also opened the ill-gotten gains of many corrupt politicians and bureaucrats to public view. For every money movement through a tax haven, there's a digital record that can be traced by a growing army of citizen journalists and activists. In the latest New Money Review podcast I'm joined by someone who's helped organise that activist army and tell some of their data-driven stories.Paul Radu is an investigative journalist and co-founder of the Organized Crime and Corruption Reporting Project (OCCRP).Paul is a winner of the Daniel Pearl Award, the Global Shining Light Award, the European Press Prize, and the Skoll Award for Social Entrepreneurship. He was also part of the Panama Papers team that won the 2017 Pulitzer Prize in Journalism.When oligarchs, corrupt politicians or criminals seek to move their money out of the public eye, the OCCRP is there to shed light on what they are doing.This is a global and a growing problem. The amounts being looted are increasing exponentially, reaching trillions a year. The money launderers are becoming ever more sophisticated in hiding what they are doing. There's a global network of bankers, accountants, lawyers and PR agents supporting them. And in many countries, the oligarchs and criminals are effectively above the law.This is a topic we should all know something about. Listen in for a fascinating discussion of large-scale financial crime, including:Why transnational organised crime groups are now more powerful than statesHow investigative reporting can combat their influenceWhy criminal money flows often follow a patternHow the OCCRP discovered the ‘laundromats' that service multiple criminal groupsWhy banks didn't notice the problem at the outsetWhy criminals are some of the cleverest entrepreneursHow money launderers exploit geopolitical riftsWhy some countries with low corruption scores are enablers of financial crimeHow open-access real estate and property registries can combat money launderingCriminals' Achilles heel—where to place their stolen moneyThe Russia/Ukraine war and political grand corruptionCoping with the enormous scale of leaked dataStaying current with ‘follow-the-money' techniquesHow a new generation of citizen investigative journalists can help

There are periods in human history when money and foreign policy converge—and this is one of them, says Paul Tucker, my guest on the latest New Money Review podcast.Tucker, deputy governor of the Bank of England for several years in the aftermath of the 2008 financial crisis, is now a fellow at Harvard University's Kennedy school of public policy and government.During what is his first-ever podcast interview, Tucker talks about his new book, ‘Global Discord: Values and Power in a Fractured World Order'.In the book, Tucker lays out principles for a sustainable system of international cooperation, showing how democracies can deal with China and other illiberal states without sacrificing their deepest political values.Drawing on three decades' experience as a central banker and regulator, Tucker applies these principles to the international monetary order, including the role of the US dollar, trade and investment regimes and the financial system.During the podcast, we discuss:Why economic policy and foreign policy are convergingDo US/China interdependencies make the world safer or riskier?Proxy wars, Russia/Ukraine and the wider US/China conflictThe relevance of the 18th century competition between England and FranceWhy shadow banking policy should be part of national security policyWhy central banks need to disclose on what terms they will bail out shadow banksThe recent liability-driven investment (LDI) crisis in the UKHow to resolve failing cross-border financial institutionsWhy the monetary architecture faces its biggest changes in 250 yearsEnsuring public oversight of digital currenciesWhy G7 governments should set out design principles for CBDCsWhy the West cannot afford another financial crisisIf you enjoy the New Money Review podcast, please like it or review it on your preferred podcast platform. And why not share an episode with a friend or colleague?

In his 2017 book, “Before Babylon, Beyond Bitcoin”, David Birch predicted that we would all live in a world of multiple competing currencies.And communities, said Birch, would be one of the five main future issuers of money (along with four other “Cs”—central banks, commercial banks, cryptographic protocols like bitcoin, and companies).But community currencies have so far struggled to get off the ground. In the UK, attempts to launch a local version of the pound in Brixton, Bristol and elsewhere have failed.Bristol's subsequent idea to launch a new app called Bristol Pay, which would reward community initiatives, is stuck at the funding stage.But there are still plenty of attempts to build local money systems from the ground up. In the latest New Money Review podcast, California-based non-profit and social entrepreneur David Anderson talks about community currencies.Anderson is president and lead volunteer at Simbi, a California-based non-profit focused on community and individual development. Simbi provides a web-based community platform to help non-profit projects find and reward volunteers. It aims to promote community development, mutual aid among those in need and the development of individual skills.In the podcast, we discuss:Why local currencies are nothing to do with cryptoWhy community currencies need incentives to workSeparating incentives from speculationThe Simbi community currency modelCommunity development and non-profit modelsCan community money compete with state, bank and bigtech money?

By keeping interest rates near zero for over a decade, central banks have created profound economic insecurity and financial fragility.That's the argument of financial historian Edward Chancellor, guest on the latest New Money Review podcast.Chancellor, author of a new book called ‘the Price of Time', says that extremely low interest rates have caused unsustainable asset price inflation, including the recent bubbles in cryptocurrency and tech stocks.And near-zero rates, says Chancellor, are also largely responsible for the weak economic growth, rising inequality, zombie companies, elevated debt levels and the pensions crises that have afflicted the West in recent years.Listen to the podcast to hear Chancellor and New Money Review editor Paul Amery discuss:How low interest rates have created tensions in markets, the economy and societyThe ancient debate over whether money should pay interestWhy the lender at interest is ‘selling time'Enlightenment thinking, natural rights and interest on loansLow interest rates, credit bubbles, financial manias and crashesWhy John Law's 1720 Mississippi scheme prefigured quantitative easingHow Ben Bernanke turned the Fed into the world's largest hedge fundThe parallels between financial markets and complex natural systemsThe UK's leveraged pension fund debacleWhy the lowest rates ever created the everything bubbleIceland's post-2008 debt jubileeCapital controls and why financial globalisation is coming to an end

Two events in the last fifteen years have fundamentally altered the way the financial system operates—and neither was planned by global policymakers.The great crash of 2008 stopped banks from extending loans to counterparties without taking any security in return. Henceforth, large credits would require collateral to be posted by the borrower.And cryptocurrencies have spawned a new form of digital money—the stablecoin—that threatens to torpedo central banks' control of the monetary system.One person who has kept a close eye on the role of collateral and stablecoins is Manmohan Singh, a senior economist at the IMF and guest on the latest episode of the New Money Review podcast.Singh, whose specialist area is the plumbing that underlies our money markets, says getting the design of the system right is crucial to ensure adequate lending and continuing economic growth.And the stakes are getting higher as central banks unravel their quantitative easing programmes, while the digital money revolution picks up pace.Listen to the New Money Review podcast for more on:How digital money is changing the role of central banksWhy stablecoins pose a real challenge for policymakersWhy the instantaneous settlement of digital money opens a can of wormsThe intraday float of the banking sector and the fungibility of moneyShould fintech money be kept separate from bank money?Should fintechs have direct access to central bank wholesale payment systems?Bank money and stablecoins—which provides better economics?Should stablecoins pay interest?Working out the net effect of quantitative tightening (QT)Why QT will be offset by the release of collateralWhy collateral moves around the system more slowly than pre-2008

“Competition is for losers,” Paypal founder, early Facebook investor and bitcoin enthusiast Peter Thiel once said.But now the monopoly power of the big tech firms has outgrown even Thiel's wildest dreams.In the latest New Money Review podcast, I ask Vili Lehdonvirta, professor of economic sociology and digital social research at the Oxford Internet Institute, University of Oxford, whether we can loosen the tech platforms' grip on money and power. Lehdonvirta is the author of a new book, “Cloud empires: how digital platforms are overtaking the state and how we can regain control”.In the podcast, we cover the reasons for the rise of huge internet companies like Google, Amazon, Apple, Facebook, Tencent and Alibaba. We discuss how the libertarian ideas of the early internet have long been lost, to be replaced by concerns over excessive corporate control and rising economic, social and political inequality.How should the increasingly powerful global digital economy be governed?Listen to the podcast to hear more on:the lost optimism of the early internetwhy eBay had to abandon its laissez-faire approach to managing its marketplacewhy the internet giants' CEOs are now more powerful than heads of statehow the digital gatekeepers now regulate markets for private profithow cryptocurrency lost its P2P promise and recreated the banking systemaddressing the bigtechs' economic and political powerthe limits of public utility regulation and competition lawhow nations can deal with transnational platformswhy internet platform users may end up governing these systems

Cryptocurrency billionaires are gaining a political foothold in countries rich and poor. Their influence now extends into governments, legislatures, charities and educational establishments around the world. In the US, cryptocurrency businesses' lobbying power now exceeds that of the big tech, pharma and defence sectors, traditionally among the biggest contributors to politicians and their parties. And crypto promoters are finding a ready audience in some of the world's most deprived and war-torn countries, often those with sizeable natural resources.Despite the recent failure by El Salvador to achieve the domestic adoption of bitcoin, the leaders of several African countries are now following suit, pushing their own cryptocurrency projects.In the latest New Money Review podcast, Pete Howson, assistant professor in international development at the UK's University of Northumbria, talks about the worrying shift towards a global political system influenced by a very undemocratic creation—cryptocurrency.In the 30-minute podcast we cover:Why did El Salvador make bitcoin legal tender?Why has the country's bitcoin experiment been a dismal failure?Given this failure, why are other countries copying El Salvador's lead?Central African Republic's plans to build a cryptocurrency hubRapper Akon's plans for crypto cities in Senegal and UgandaHow Russia is projecting political power into Africa using cryptocurrenciesWhy Binance's CEO is meeting the world's politiciansDisaster capitalism and cryptocurrencyNatural resources and the new crypto colonialismWhy many US and UK politicians are on the crypto lobbyists' payrollHow governments and regulators can fight back

There's a rising superpower in the world of money—a country that's cut off from the global financial network, but which is playing an increasingly prominent and disruptive role within it.Though the country denies it, researchers are almost certain that over the last three decades, North Korea has been behind some of the most audacious and brazen frauds in history. These have involved counterfeiting, theft, hacking, bank raids, ransomware and cyber-attacks. The attacks have been planned well in advance and executed with military precision. North Korea's evident skills in these areas have both shocked and impressed the analysts who have studied its exploits.  As more and more of our payments move online, North Korea's ability to disrupt the financial system through hacks, thefts and other disruptive activity is getting more dangerous.To talk about this important topic, in the latest New Money Review podcast I was joined by Geoff White, an investigative journalist, a specialist in cybersecurity and the author of a recent book on North Korea called the Lazarus Heist.Listen in for a thrilling story that anyone involved in finance, technology or politics should know about.

Record temperatures, droughts, war, COVID, bans on movement and meeting…it's been a witches' brew of events. Is nature telling us that humans have overburdened the planet?Not yet, says Amlan Roy, author of “Demographics Unravelled” and our guest on the latest episode of the New Money Review podcast. The global population can still grow further without triggering more damage, says Roy: technological advances and better education could let us add 2bn more humans by 2050, he argues.The study of human traits such as population numbers—demographics—is the single most important subject that no one pays attention to, says Roy, citing management guru Peter Drucker. But when people do pay attention to demographics, most then miss the point, Roy says in the podcast. That's because we all tend to focus on a single statistic—age—only.“An 80-year-old in Japan is different from an 80-year-old in Sweden, Italy, Greece or Germany,” says Roy, citing the five countries in the world with the oldest average population.“Consumption is different in those countries, workers are different, education is different and institutions are different.”We need to research and understand these broader traits of humans to see what drives economies and financial markets, Roy says in the podcast.Roy, a former investment banker, is a research associate at the London School of Economics and a fellow at the Institute and Faculty of Actuaries.Listen in to a 30-minute discussion of:Why fewer workers are supporting more over-80sWhy birth rates in both developed and developing countries are fallingWhen the global population will peakHow to meet the sustainability challengeWhy we all need a hugWhy different countries need different immigration modelsThe importance of bridging the gender gapWhy demographics drive GDP growth, inflation, debt and asset pricesThe pernicious effect of negative interest rates

Whoever dominates the world's energy markets rules global politics.Coal fuelled the expansion of the British empire. Control over oil flows helped the US dictate the settlement after World War 2. Now we're entering a more turbulent period. The climate crisis is upon us, meaning we have to slow—even cut—greenhouse gas emissions. This year, Vladimir Putin's weaponisation of energy supplies has raised the stakes dramatically. But as we race to replace oil, gas and coal with renewable energy technologies, it's China that will dominate both energy and money during the next century, says John Bowlus, guest on the latest New Money Review podcast.In the podcast, Bowlus also says he believes the end of the hydrocarbon era will bring two centuries of global economic growth to an end, shrinking the world population.“The growth dynamic—that whole paradigm—is unsustainable,” he says.Bowlus, an academic at Turkey's Kadir Has university, researches how energy, especially oil, has shaped global politics, and how geopolitical risk and technological developments affect national and global energy regimes.Listen in to hear a broad-ranging discussion of energy, power and currency regimes. We cover:The difference between the 1970s energy price shock and today's crisisThe global energy market power shift from the US to ChinaChina as the leader in renewable energy technologyWhy volatility in geopolitics is related to the energy transitionHow coal and oil helped drive past prosperityWhy the climate crisis will shrink both population and economiesThe use of sanctions to defend the dollar and US oil marketsThe shift from hydrocarbons to renewables will end the dollar eraThe coming expansion of nuclear power

Take any story in the daily business news and there's likely to be a securities finance angle to it, says Roy Zimmerhansl, my guest in the latest episode of the New Money Review podcast.Under his original plan to buy Twitter, Elon Musk, for example, was supposed to pledge Tesla shares worth $62.5bn as part of a margin loan. The debt was to be secured by that Tesla stock, which could be seized by the lenders in the case of default.Musk is now trying to back out of the deal. But such repurchase (“repo”) and securities lending agreements are a critical but little-understood part of the financial markets. Roy is a securities finance expert and someone well-equipped to throw light on this area. A 42-year veteran of the financial markets, during his career he has specialised in global custody, securities lending, prime brokerage and securities finance. He was in charge of securities lending for several banks and broker-dealers and now runs his own consulting firm, Pierpoint Financial Consulting Ltd.In the 40-minute podcast, Roy tells listeners why we should all be paying closer attention to securities finance. We cover:Why securities lending and repo operations are critical to wholesale financeHow lending and repo can lower the cost of financeWhy your pension fund and insurer may be lending their shares and bondsHow the 1982 Drysdale default changed bond lending practicesHow a US bankruptcy code change in 1984 sparked huge growth in repoWhy Roy turned down Barings bank as a potential clientWhy having good collateral won't protect you from a bad counterpartyShort selling bans, frozen assets and market liquidityWhy 2008 was the high-water mark for repo and securities lending

In 2008, a few obscure three-letter financial products—MBS, ABS, CDOs and SIVs—set off the biggest financial crisis in history.Now, could a new alphabet soup of DAOs, NFTs, Dapps, DMMs and DEXes pose similar risks to financial stability?Yes, says Hilary Allen, our guest on the latest New Money Review podcast. Allen is a professor at the American University Washington College of Law, where she teaches financial regulation.The latest acronyms—for decentralised autonomous organisations (DAOs), non-fungible tokens (NFTs), decentralised applications, market makers and exchanges (Dapps, DMMs and DEXes)—all come from the decentralised finance (“DeFi”) market.DeFi is a $210bn market of financial services built on top of cryptocurrency networks like ethereum. DeFi activities parallel those undertaken in the traditional financial system, such as trading, lending and investing—but without banks, central trading platforms or investment firms.The sector includes a number of automated lending protocols, such as Aave, bZx v2, Compound, Maker, Polygon Aave and Venus. It also contains automated market making protocols, such as Uniswap, Curve, and Balancer, and automated investment vehicles, such as Yearn and Convex.But according to Allen, DeFi increasingly resembles the ‘shadow banking' sector that triggered the 2008 meltdown—and very few people are paying attention. Allen says that three key risks in DeFi—heightened leverage, rigidity, and the potential for investor runs—are the same as those that grew out of control fifteen years ago.“What has really struck me the most,” Allen says in the podcast, “is how quickly we forget.”

On 28 February the US, EU and UK froze most of the Russian central bank's $630bn foreign currency reserves, responding to the country's invasion of Ukraine.In the words of the UK government, the freeze aimed “to prevent the central bank of Russia from deploying its foreign reserves in ways that undermine the impact of sanctions imposed by us and our allies”.But around 20 percent of the CBR's reserves—the portion held in gold—could not be touched by sanctions.That's because Russia's gold is held within the country. In theory, it is still free to use its gold as it wishes. Although Russia will struggle to find a counterparty in a Western nation to deal with it, it may find willing buyers elsewhere.In the latest New Money Review podcast, John Read, chief market strategist at the World Gold Council, talks about gold's role as the original censorship-resistant form of money, as well as its place in an investment portfolio.John has over 30 years' experience in the gold market as a hedge fund manager, a precious metals strategist, an equity analyst and as an employee of a gold mining firm. He has a degree in mining engineering from the Royal School of Mines, a constituent of Imperial College, London.Listen to the podcast, “the future of money in 30 minutes”, to hear John comment on the following topics:What's driven the recent gold price rise?The role of central banks in the gold marketIs Russia's gold subject to sanctions?Gold market dislocation—what happened in March 2020?The physical delivery of commodities sets the priceOnly 10% of large investors own gold as a strategic allocationHow gold impacts a portfolio's risk-adjusted returnsWill any country ever link its currency's value to gold again?The dollar's reserve currency statusGold as the ultimate store of valueHow to invest in goldHow to keep track of gold market sentiment and trends

“In the case of Putin we are in this very dangerous place. We have reacted so aggressively and moved so far, so fast that he is personally humiliated under anything other than absolute victory in Ukraine. That makes it impossible for him to back down. It's a very dangerous negotiating position to have put yourself into.”In the latest New Money Review podcast, Mike Green, chief strategist at Simplify Asset Management, discusses geopolitics, game theory, market structure and risk.Green believes our policymakers have created dangerously unstable financial, political and social systems by preventing diversity—whether that's opinions on coronavirus, the Ukraine war or the way equity markets are structured.“No-one wins in these unstable systems,” Green says in the podcast. “Human society depends on relative stability to flourish but we're creating conditions of extraordinary instability. And those marginally past the point of subsistence are the most likely to be damaged.”Green is a former hedge fund manager, having worked for Peter Thiel's family office and in a start-up seeded by Soros Fund Management.His work on the changing structure of equity markets has been presented to the Federal Reserve, the BIS, the IMF and numerous other industry groups and associations.Listen to the podcast, ‘the future of money in 30 minutes', to hear Green discuss:How the rise of index investing has changed marketsThe risks of momentum-driven tradingCoyotes and rabbits—how we've destroyed market heterogeneityGrowing absolute scarcity in the world's raw materialsCold War revisited—the new global competition for client statesThe rise of China—are we at the end of the dollar regime?Are any asset markets cheap?The sanctions craze and the lost art of diplomacyWhy cornering Putin is dangerousWhy the marketing of cryptocurrencies has been criminalWhy decentralised finance is promising but needs proper governance 

Over the last decade India has undertaken arguably the most ambitious digitisation programme of any country in the world.Its so-called ‘India stack'—a public digital infrastructure that allows governments, businesses, start-ups and developers to interact—is the largest open software platform of its kind. Nearly all of India's 1.4bn citizens are now included in a biometric digital identity system, which is linked to a real-time payments network and a credential management platform.India's payments system has been called the most advanced in the world, and recent events have shown how far-sighted its planners were. Since the coronavirus pandemic, more and more of us have turned to digital forms of payment, discarding cash in the process.To make sure they stay relevant in the digital money era, governments around the world are now racing to introduce state digital currencies (also called central bank digital currencies or CBDC).Some say China is well ahead in this global competition—it's been trialling the new digital yu'an at the winter Olympics.The US is playing catch up but in a serious way—the Federal Reserve has released two important papers about CBDC in the last month.But India is also now firming up its digital currency plans. The country's finance minister said earlier this month that India will introduce a new CBDC later this year or in 2023.To discuss the digital rupee and its likely impact, I'm joined on the latest New Money Review podcast by Tanvi Ratna, a technologist and policymaker who's based in Bangalore.Tanvi, who is founder of a think-tank called Policy 4.0, has worked with both the US and Indian governments on technology policy and is closely involved with India's digital currency debate.In the podcast, we discuss:The origins of India's digitisation pushAadhaar—India's state digital identity systemThe India stack as a public infrastructureIndia as a rising fintech hubDigital currency and monetary policyThe design of the digital rupeeIndia's plans to tax cryptocurrencyThe geopolitics of CBDC—the US, China and IndiaCurrency convertibility and international usageHow India may lead in the global debate over digital privacy

In the last decade we've seen four massive leaks of data from offshore financial centres: the Panama, Paradise and Pandora papers and the FinCEN files.No-one knows who leaked this information. But the data made one thing crystal-clear: the world's rich and powerful, including its wealthiest criminals, love using shell companies to hide their assets.And it's not just a few small, sunny Caribbean or Pacific islands that make these financial flows possible.It's also corporate vehicles in places like the UK, where you can set up a limited company for as little as £12.In the recent Danske Bank scandal, €200bn of suspicious transactions from the former USSR flowed through the Estonian branch of the Danish bank between 2007 and 2015.In nearly all these flows, British limited companies and partnerships, owned by unknown entities, were critical in helping launder the money. In the latest New Money Review podcast, one of the world's leading experts talks about the mechanics of money laundering.Graham Barrow has worked with many banks to help combat illicit money flows. He is also co-host of a brilliant podcast called the Dark Money Files, which I spent a lot of time listening to last year.The UK, where I live, keeps saying it will crack down on the abuse of shell companies.More cynical voices argue that London is so dependent on dark money it has no real incentive to do so.So far, the cynics seem right. The UK government has failed to act on its promises to tighten up the rules on identifying the owners of companies.But maybe all is not lost. Listen to Graham for thirty minutes and make up your own mind.In the podcast discussion, we cover:What is dark money?Who benefits and who suffers from dark money flows?The impact of recent data leaksProfessional money launderers—the enablers of dark money flowsThe transnational nature of money laundering schemesWhy limited companies and partnerships are the money launderer's tool of choiceThe dark money soup—UK legal entities controlled by offshore companiesThe need for UK Companies House reforms and a UK property ownership registerWhy only an idiot would launder money through cryptocurrencyWhy the information revolution will help combat dark money flowsExplaining money laundering to the average citizenThe money laundering connections surrounding the 2020 Beirut blast