please short answer for each question and no reference needed some guides will be provided in the questions:
1- Choose three (3) principles of financial market infrastructures (CPMI principles of FMIs, in the readings, summarised in the lecture slides) that you think are particularly relevant for regulating stablecoins. In each case, explain briefly why it is important for regulating Stablecoins. (guide: 3-4 (max 100 words) sentences each) Choose from 22 principles here – https://www.bis.org/cpmi/publ/d101a.pdf
2- Describe one (1) approach early money changers used to manage counterparty risk, when accepting each other’s notes?(counterparty risk is the risk that the other money changer goes bankrupt or closes shop and runs away with the money). Name the approach. Briefly explain how it reduced counterparty risk (1-2 sentences)
End of Europe’s Middle Ages – Banking in the Middle Ages (umb.edu)
3- Before central banks, who was in a position to provide liquidity, in the event of financial uncertainty/ bank runs? Was that a problem?
4-List three problems/frictions with cross-border payments.
5- we discussed both private and public sector cross-border solutions to overcoming cross-border frictions (eg Correspondent banking, Hawala, Wise, cryptocurrencies, CBDC). Each has its own advantages and disadvantages.
a) Which of those do you think is currently most effective approach for cross-border payments, assuming that it is licensed to operate in your countries of interest? Give at least two (2) reasons why. (3 points, max 100 words)
b) How effective do you think AML/CFT is, under that approach? Why? (max 100 words)
6- In 5 years’ time, what do you think will be the most effective approach for cross-border payments?Give two (2) reasons why: ( max 100 words)
7- Who do you think will handle AML/CFT? Will it be effective? Why?
8- Who are the three types of professionals usually responsible for AML/CFT? Hint: it usually begins with know-your-customer (KYC).
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