The Bank of England is open to letting new payment services such as Facebook's upcoming Libra hold funds overnight with the central bank, something historically limited to commercial banks.
In prepared remarks to bankers in London, the bank's governor, Mark Carney, said it "makes sense to consider" extending access to new payment providers, as they "can improve the transmission of monetary policy and increase competition."
He said Libra, in particular, could lower costs for money transfers.
There are several reasons why financial institutions hold money in reserve at the central bank but perhaps the most important is that it helps facilitate payments between banks and businesses. Being part of the plumbing of the financial system could be a benefit to upstarts like Libra.
Though Carney was broadly supportive of the future of new payment systems and their role in the financial system, he warned that the bank "approaches Libra with an open mind but not an open door."
As such, he said, "it would have to meet the highest standards of prudential regulation and consumer protection."
Carney's remarks, provided by the bank ahead of their delivery later Thursday, echoed concerns raised by other regulators around the world.
Facebook, along with such partners as Uber, Visa, Mastercard and PayPal, unveiled Libra earlier this week. The new currency, set to launch next year, could open online purchasing to millions of people who do not have access to bank accounts and could reduce the cost of sending money across borders. Libra could also prove attractive to people in countries beset with hyperinflation such as Venezuela.
But French Finance Minister Bruno Le Maire said Facebook must ensure that Libra won't hurt consumers or be used for illegal activities.
U.S. Rep. Maxine Waters, a California Democrat who heads the House Financial Services Committee, called on Facebook to suspend plans for the new currency until Congress and regulators are able to study it more closely.
Facebook said it will comply with all existing financial regulations, though it has not offered many details. The company said its wallet app for using Libra will walk people through a verification process to ensure they are who they say they are.
To get the access, Carney said Libra will have to address issues ranging from anti-money laundering to data protection to operational resilience. And Libra, he added, must be a "pro-competitive, open platform that new users can join on equal terms."
"Whatever the fate of Libra, its creation underscores the imperative of transforming payments," Carney said in his wide-ranging speech.
Carney said the bank needs to move with the times, as the nature of commerce changes. He said one-fifth of all sales in the U.K. were online last year and will grow to a quarter next year. And cash now makes up just a quarter of all payments, down from two-thirds a decade ago.
Libra has an additional challenge to confront. Facebook has faced a mountain of criticism over the past year or so over its poor record on privacy and its dominance in social media, messaging and related businesses.
Carney also said the bank will stress test the resilience of the British financial system to extreme weather. According to the bank, severe weather events such as flooding and heatwaves could mean higher insurance claims and economic losses such as reductions in home value. The design of the test will start in the fall, he said, and be completed in 2021.
The bank said the shift toward a greener economy also poses financial risks, including to banks and insurance companies that invest in energy companies.
"The path to a carbon-neutral economy will affect every institution in this country — very much including the Bank of England," Carney said. "We need to do more than just cutting out cups and bringing up bees. We must lead by example."
NEW YORK (AP) — Even as many Americans say they learn about the 2024 election campaign from national news outlets, a disquieting poll reveals some serious trust issues.
About half of Americans, 53%, say they are extremely or very concerned that news organizations will report inaccuracies or misinformation during the election. Some 42% express worry that news outlets will use generative artificial intelligence to create stories, according to a poll from the American Press Institute and The Associated Press-NORC Center for Public Affairs Research.
The poll found 47% of Americans also expressing serious concern that news outlets would report information that has not been confirmed or verified, and 44% worry that accurate information will be presented in a way that favors one side or another.
Half of Americans say they get election news always or frequently from national news outlets, a percentage that is higher among older respondents, the poll found.
“The level of engagement is good,” said Michael Bolden, CEO of the American Press Institute. “The thing that's most concerning is that they're not sure they can actually trust the information.”
Years of suspicion about journalists, much of it sown by politicians, is partly responsible, he said. People are also less familiar with how journalism works. The poll found about half of respondents say they have at least a moderate amount of confidence in the information they receive from either national or local news outlets when it comes to the 2024 elections, though only about 1 in 10 say they have a great deal of confidence.
“There may have been a time when people knew a journalist because one lived on their block,” Bolden said. “The way the industry has been decimated, that's much less likely.”
Simply putting out the news often isn't good enough anymore, he said. There's a growing disconnect between news organizations and communities that the outlets need to address, by helping to let people know what journalists do and how people reporting news are their friends and neighbors, he said.
Outlets should lean into a convenor role, bringing people together for newsworthy events, he said.
About half of U.S. adults say they follow the news about presidential elections closely, with older adults being more engaged. About two-thirds of Americans age 60 or older say they keep a close eye on presidential election news, compared wth roughly one-third of those under age 30.
The same trend is seen with local and state election news. While the poll found that 46% of Americans age 60 or older say they follow news about local and state elections closely, only 16% of people age 18 to 29 said the same thing.
“As they transition to becoming older people, will they begin to care?” Bolden asked. “If they don't begin to care, what will that mean for local and state communities?”
Young people, those under age 30, are about as likely to get election news from social media or friends or family as they are to get it from national or local news outlets, the poll found. Black and Latino adults are somewhat more likely to express “a great deal” of confidence in the reliability of social media as a source of election news than white Americans are.
That's both a warning sign, since there is a lot more misinformation to be found on social media, and an opportunity for traditional outlets to make more of their work available this way, Bolden said.
About 6 in 10 Democrats say they get election news from national outlets at least frequently. That's more than the 48% of Republicans or 34% of independents, according to the poll. Republicans are more likely than Democrats and independents to express concern about inaccurate information or misinformation in news coverage during the upcoming elections. About 6 in 10 Republicans are concerned about this, compared with about half of Democrats.
Besides inaccuracies, many also expressed serious concern about election news that focuses too much on division or controversies or concentrates on who may win or lose — the horserace aspect of political coverage — rather than issues or the character of candidates.
Most Americans say that for them to make informed decisions about the 2024 state and local elections, they want national and local news outlets to highlight candidates’ values or their different positions on key social issues. In each case, about three-quarters of U.S. adults say they would like “a lot” or "some" coverage of these topics.
The poll of 2,468 adults was conducted March 21-25, 2024, using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of error is plus or minus 2.9 percentage points.
David Bauder writes about media for The Associated Press. Follow him at http://twitter.com/dbauder.
FILE - Journalists line the press stand before Republican presidential candidate former President Donald Trump speaks at a caucus night party in Des Moines, Iowa, Jan. 15, 2024. Attitudes toward the media and political news ahead of the election were explored in a poll from the American Press Institute and The Associated Press-NORC Center for Public Affairs Research. (AP Photo/Andrew Harnik, File)
