Dollar dominance in the Global Financial System_ Dissatisfaction without Displacement
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0:00
Ladies and gentlemen, first of all, welcome all of you in the current event. So now we publish the latest version of our financial and economic review. So that's the second one in 2026. So just some words about the new topic and about the n…
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1:16Bab 2: So, of course, we have to talk about the very high level of debt in the global economy, the very high level of debt in the US economy. 302s · Speaker 2
So, of course, we have to talk about the very high level of debt in the global economy, the very high level of debt in the US economy. So now we have a paper about demographic changes and human capital retention, rethinking the EU cohesion …
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6:20
and advice for sovereign institutions at the UBS Asset Management. Massimo, thank you very much that you accepted our invitation to the current event. So now the floor is yours. We are pretty interested in your thoughts about the role of th…
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11:10Bab 4: What I mean, in conversation with central banks a few years ago, we would not talk about Fed independence. 62s · Speaker 4
What I mean, in conversation with central banks a few years ago, we would not talk about Fed independence. There is a risk to Fed independence. This was a given. Now there is this conversation. Could the Fed lose its independence in a more …
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12:13Bab 5: in the system. 125s · Speaker 3
in the system. And now the question and the last point I would like to share is what does it mean? What can we expect in the future? So I think the problem of many of the article and the analysis which is done on the effects reserve managem…
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14:18Bab 6: Nowadays, if you look at years after year, particularly after the first Trump presidency, things like. 299s · Speaker 4
Nowadays, if you look at years after year, particularly after the first Trump presidency, things like... trade war, escalation in conflict, Russia, U .S., Russia, U .S., China, Middle East, they have become dominant. This has become the mos…
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19:19Bab 7: That's one definition that I saw in some literature. 302s · Speaker 1
That's one definition that I saw in some literature. Fundamentally, if they need, they are able to give as much liquidity as needed. And if you look at over the last episode of financial crisis, it has always been the Fed, the ultimate prov…
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24:21Bab 8: limited and marginal. 300s · Speaker 2
limited and marginal. And then there is, of course, the question of gold. Well, if I don't like the dollar because I'm concerned about Mr. Trump, I'm concerned about the Fed, I'm concerned about debt sustainability, I don't know what's happ…
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29:21Bab 9: because as I said, sooner or later they will have to deal with exchange rate and the liberalization of capital movements. 226s · Speaker 1
because as I said, sooner or later they will have to deal with exchange rate and the liberalization of capital movements. You cannot remain a fortress in terms of financial market, but being the most open economy in terms of trade. It worke…
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33:08Bab 10: Thank you very much. 300s · Speaker 2
Thank you very much. I invite to stage my two other panelists. The first is Fridges Ferdinand Heinz from the OTP Fund Management, and also Robert Rekessé, who is from the Central Bank of Hungary, from the Treasury Department. And in the nex…
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38:08
we actually kept for a long time a full hedge of the US dollar, but even the dollar, after around June, everyone and their grandmother was convinced that the dollar is going down the drain, then this depreciation... had a long, long break. …
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43:10Bab 12: like the political interference of the current administration in the federal affairs. 109s · Speaker 1
like the political interference of the current administration in the federal affairs. It is also a thing that doesn't really support the dollar as the leading reserve currency. this time around. Although I think it is worth mentioning that …
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45:00Bab 13: over 10%. 71s · Speaker 2
over 10%. So I think the gold buyings of the central banks, this is the most clearly sign of this de -dollarization process if we look at like the reserve management globally. my practice. This is easy to tell. This is very unique, our regi…
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46:11Bab 14: Thank you. 270s · Speaker 4
Thank you. You pointed out some examples where we can see this change on the dollar, which were, I think, very interesting. You know, everybody is learning that markets are perfect and all the information is in the price. Possibly not the h…
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50:41Bab 15: Now, what would happen if instead that there is a situation where we start to see AI going back? 231s · Speaker 5
Now, what would happen if instead that there is a situation where we start to see AI going back? We see that there are companies that hyperscalers fail to translate this massive investment into profits. We are going to see cash flow issues …
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54:36
Yeah, so it was very interesting to get the AI in because I think when we are talking about dollar dominance and trying to find what is the clear reflection of the role of the dollar, for sure the FX reserves is more like about the fixed in…
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59:40Bab 17: because there are two things, and you mentioned it, that U . 164s · Speaker 3
because there are two things, and you mentioned it, that U .S. dollar is not equal with U .S. treasuries. I can see some signs of de -dollarization, but more signs of de -treasurization. So if you take a look at numbers, just like 20 years …
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1:02:25Bab 18: .S. treasury holdings. 140s · Speaker 1
.S. treasury holdings. I don't know to what extent in reserves as well. Not significantly. Okay, we know that China has been reducing US Treasury only, but I think in China we're talking about sanction risk. It's not an investment decision,…
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1:04:46
It is quite interesting because both of you said in some certain way that you have to see the others if you are talking about the dollars because, you know, to be in a competition you have to beat all the others. and not do the personal bes…
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1:05:58Bab 20: Thanks a lot. 104s · Speaker 1
Thanks a lot. Sometimes we have a little bit of discussion about this in the family because my brother happened to deal with this topic. He is head of the financial law division at the European Central Bank, and they are looking at this iss…
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1:07:42
Yeah, I think these solutions are more like transactional. So these useful transaction digital currencies. Stable coins are a bit more interesting because stable coins are backed by short -term debt. Most of the stable coins are denomated i…
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1:08:54
so so digitization is a big trend and I'm including this topic tokenization of asset but sticking it to the question of CDBC and stablecoin We actually run every year a survey. We have a special. We did something about CDBC and stablecoin a…
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1:10:00Bab 23: short -term bonds, short -term UST, attractive. 96s · Speaker 2
short -term bonds, short -term UST, attractive. Now, here there is an interesting development, because I got the feeling that Europe is taking a lot of risk here, a lot of gamble, and I'll tell you why. Because actually, Europe wants to do …
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1:11:38
Just a final question for all of you before turning to the audience. You mentioned four different scenarios at the end of the paper, and what is your view about which will happen? So everything is keeping this status quo? About the US dolla…
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1:13:01Bab 25: Yeah, it was a takeaway too that these alternatives are not mutually exclusive. 116s · Speaker 3
Yeah, it was a takeaway too that these alternatives are not mutually exclusive. But history tells us, like, take what happened with the British pound and the US dollar. It took, like, decades to change it. So if you ask me about the next fi…
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1:14:58Bab 26: is not an investment record but on the five -year horizon our planner says yes yeah so anyway Do anybody have a question in the audience? 226s · Speaker 4
is not an investment record but on the five -year horizon our planner says yes yeah so anyway Do anybody have a question in the audience? Thank you very much. My name is Janusz Müller. I'm not an expert of this topic, but it is very importa…
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1:18:48Bab 27: On the swap agreement, yes, absolutely. 227s · Speaker 1
On the swap agreement, yes, absolutely. You saw in the graph that I showed you before, actually, China comes after the US already in terms of stock of swap agreement. I mean, on the question of the CDBC, I mean, maybe before I was not clear…
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1:22:38Bab 28: So we are running out of time, so I want to thank you especially for Max, for all the other panelists. 110s · Speaker 4
So we are running out of time, so I want to thank you especially for Max, for all the other panelists. I hope you enjoy this. So dear audience, thank you very much for your kind attention. I think we had a very interesting panel discussion,…