In this report, we assess two new papers from the European Banking Authority (EBA) going in depth on emerging fintech risks, here and here. So far, both the Basel Committee (see FSM Report FINTECH18) and the FSB (see Client Report FINTECH15) have taken only equivocal positions on these risks even though they remain areas of deep concern not just for regulators, but also heads of state. U.S. policy to date is similarly uncertain, with the OCC recently reiterating that special-purpose fintech banks (see FSM Report FINTECH10) will come under bank-like regulation, the FRB is very wary of fintech (see Client Report FINTECH7) and Treasury has yet to release its long-awaited fintech report. In the absence of clear U.S. policy, EBA’s conclusions will drive global decision-making and thus set the agenda for a sector that knows no borders.
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