CBFL Webinar: Legal Tender and the Micro-Structure of Financial Stability

On 4 June 2024, Professor Will Bateman (Associate Dean for Research at the ANU College of Law) conducted a webinar with the Centre of Banking and Finance Law discussing the form and function of “legal tender”, exploring questions about the nature of financial stability in a world without legal tender. The talk first dived into the technicalities of legal tender by examining the law of debt, contract, tort, insolvency/bankruptcy and civil procedure, claiming (inter alia) that the law of tender provides less transactional freedom regarding payment than is often assumed. Second, the talk proposed a set of functions for the concept of legal tender related to financial market functioning: nominalistic payment finality; demarcating “credit” and “money”; while clarifying the type and scale of public subsidies to the financial system. Last, the talk argued that an economy without the concept of legal tender faces a new set of policy challenges to financial stability (arising from moral hazards inherent to maturity transformation without public payment media) and proposes a set of solutions.