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Given Yellen's hearing today, much talk about how monetary policy has done everything it can to tackle inequality. Simply not true. Many examples around the world of central banks investing in capital formation to help grow little emerging businesses and equalize the odds. 1/n
Here is the Singapore central bank's recent announcement of $5B into attracting and growing new VC funds to invest in startups. https://www.centralbanking.com/3858391
And in case you think they don't know what they're doing, the Monetary Authority of Singapore was recently named Central Bank of the Year. 3/n https://www.centralbanking.com/awards/4029066/the-winners-of-the-2019-central-banking-awards
Here is the Bahrain Central Bank building a fintech lab that creates an "open banking API sandbox that enables fintech startups to develop, test and deploy fintech solutions." That should accelerate innovation to move smaller amounts of capital faster. 4/n https://mea-finance.com/central-bank-of-bahrain-launches-a-first-of-its-kind-fintech-platform-to-drive-innovation-in-the-region/
The central bank of Kuwait has created a regulatory sandbox for fintech innovation that will "treat startups differently based on their size and sophistication, with proportionate rules at different scaling levels." 5/n https://fintechnews.ae/2955/kuwait/central-bank-kuwait-national-payment-system-knps-sandbox/
Here's the central bank of Lebanon actively encouraging Lebanese banks to make equity investments in startups. http://www.fransabank.com/English/SociallyCommittedGroup/FransabankCSRInitiatives/Economy/Pages/Equity-Investments-in-Start-Ups---Central-Bank-of-Lebanon--Circular-331.aspx 6/n
There are many more examples. America set the standard for central banks last century, but the idea of an "ivory tower" for central banks that don't get involved in the dirty business of moving little amounts of capital for little entrepreneurs is... well, last century. 7/n
Americans have this delusion we are still world pacesetters on issues like monetary policy and entrepreneurship. Simply not true anymore. Central banks must lead. And leadership is more than just working with Wall Street titans to keep institutional capital markets liquid. 8/n
Central banks should facilitate the movement of small checks, not just large checks. There's so much clogging of capital flows in small check sizes. 83% of startups aren't served by banks or VC. Banks rarely do loans under $100K. 70%+ of VC is concentrated in 3 states. 9/n
Time to shift our thinking on the power of central banks. More imagination. More entrepreneurial thinking. More innovation. Less ivory tower. Less hyper-focus on mainly Wall Street's needs. Less focus on large check sizes only. 10/10
