Building on our alert last week, we here provide clients an in-depth analysis of the Financial Stability Board’s latest effort to understand tech-driven finance and its strategic and systemic impact. As in its prior report (see Client Report FINTECH15), the FSB in 2019 remains flummoxed by what it acknowledges is a paradigm-shifting phenomenon away from regulated banking, insurance, payment, settlement, and clearing services, brokering, and asset management. Noting an array of structural, systemic, and consumer risks, the FSB nonetheless offsets these with the benefits of innovation. The thrust of this report addresses competitive threats to regulated financial providers which, the FSB fears, will take undue risk as big-tech companies encroach on their markets. This focus – which of course also reflects concern about FSB-member regulatory jurisdictions, is in our view unlikely to spur action on the threats highlighted by the FSB and those to which we drew attention in our most recent report. Policy-makers are likely to be still more unable to enter a contentious debate if their work is deemed an effort principally to protect big banks and other legacy providers.
The full report is available to retainer clients. To find out how you can sign up for the service, click here.