A call to promote the “M6 Initiative” at the conference on "The Monetary System: Analysis and New Approaches to Regulation" (Wiley)

PRESS RELEASE – COMMUNIQUE DE PRESSE

“The Monetary System – Analysis and New Approaches to Regulation”

The conference held on January 27th on the book published by Wiley, attracted a large audience. Attendees included the senior executives from the AMF, the Banque de France, Europlace, the EIFR, major companies and banks, private equity groups, as well as economists, lawyers, etc. The law firm Jeantet&Associés hosted the event which was co-organized with the French American Foundation, and was moderated by Agefi. Mrs. Loraine Donnedieu de Vabres, Partner of Jeantet, opened the session.

She delivered a message from Mrs. Christine Lagarde, who wrote the foreword of the previous book “la monnaie virtuelle qui nous fait vivre”. The authors, Jean-François Serval and Jean-Pascal Tranié shared the stage with the Agefi journalist, Laurent Chemineau. Mr. Tranié commented statistics showing how the financial world has become disconnected from the real world, leading to the need for other aggregates than those based on central bank money (M1+M2+M3). Mr. Serval developed how M5 (a new concept) would encompass the circulating exchange means of the entire world. As the authors’ thesis is that all financial companies have to be taken in statistics, the debate came to the Fair Value topic. Xavier Musca, former head of the French Treasury, expressed a positive interest for the authors’ view of apprehending the financial world globally. He added that the question of Fair Value of financial instruments on portfolios was mostly for banks and that certainly there was an issue of volatility. Mr. Musca was interested to understand more about the feasibility of the project and if it would be able to provide granular analysis about the real time localization of money flows. Messrs. Serval and Tranié answered that despite technical obstacles (such as the identification of holders as detainees and as actors – not as individuals with IBANs, but rather as enterprises with LEI) it seems possible to handle the billions of data necessary for this purpose. Nevertheless, specific issues will need to be addressed, for example to assess local impact of companies, acting in several countries but representing one single risk. Several other interesting questions were raised by the audience in particular from Guillaume Hannezo, and answered by the authors covering the topic of Quantitative Easing and what could be done to save the system.

As a final statement, a call was made to create an association in order to promote the adoption of M5 and M6 by international institutions (the “M6 initiative”). Individual supports and contributions for this task will be highly welcome. Several other conferences will be organized in Paris, London, New York and Singapore. Please write to aschwarz@groupeaudit.eu if you wish to attend one of them and/or want to support the “M6 initiative”.