In the wake of the U.S. District Court decision allowing the merger between AT&T and Time Warner, many concluded that U.S. antitrust enforcement still shies away from all but the most obviously anti-consumer transactions. That AT&T waited barely a week before belying its assertions before the judge and significantly raising DIRECTV rates will make critics even angrier, but it’s nonetheless likely still true that most big tech deals will close. Most big tech firms will thus continue to gobble up more and more of our daily interactions with all things audible, commercial, transactional, and even personal. It’s in this context that a new set of papers, here and here, from European regulators warrant careful consideration.

As a forthcoming FedFin analysis will show, financial-market supervisors are deeply unnerved by giant tech platforms but profoundly unable to decide what to do about them. The more ambiguity, the greater the advantage.

The new papers come from the European Banking Authority (EBA), which took a detailed look at the fintech products – robo-advice, mobile wallets, public-cloud payment services – that it finds the farthest down the road to market reality, at least in the EU. The EBA also looked at what all this change does to incumbent credit providers – i.e., banks. In short, nothing good.

Some of the damage EBA anticipates is of course the banks’ own fault due to huge books of non-performing loans, poor customer service, and the like. However, that banks may well deserve to lose to non-banks does not wash away the structural, systemic, and consumer-protection problems sure to arise when regulated firms are replaced by voracious, innovative, and unregulated competitors.

As I noted in a recent talk, the Basel Committee has posited five outcomes for banks facing fintech. The least likely among them in its view is renewed innovativeness and competitiveness from existing banks. More likely are fates ranging from banks serving as distributional hubs for fintech, assuming only the unprofitable core infrastructure tasks big tech doesn’t’ want, or simply being disintermediated altogether.

The Financial Stability Board is similarly worried, but it goes farther to contemplate finance based on artificial intelligence and machine learning. Here, the FSB worries a lot about “natural monopolies” – i.e., the market control huge firms derive from their awesome ability to integrate horizontally and vertically across an entire ecosystem of transactions without ever asking an antitrust authority’s permission. The EBA and FSB also fear – rightly I think – that natural monopolies pose tremendous correlation risk to financial-market resilience, product offerings, risk analytics, and even the customers who are served or left behind.

Do we really know what would happen to finance if our iPhones suddenly went dark? What about thunderstorms in the cloud over the payment system? How will personal financial data – let alone critical financial-market intelligence – be safeguarded from human or AI flying-finger errors, opaque and discriminatory methodologies, or malicious attack?

Earlier this week, we alerted clients to a new initiative in the U.K. that for the first time establishes that operational resilience is at least as systemically essential as traditional safety-and-soundness protections. The U.K. standards would apply only to financial institutions and market infrastructure such as CCPs. That nation’s regulators like almost everyone else’s simply do not have authority over anyone fool enough not to get a charter as a regulated financial institution. However, at least the U.K. is not side-stepping the need to make finance as operationally resilient as it can, the best that it can.

The longer other regulators survey the landscape, write worrisome reports, and then conclude only that more monitoring is needed, the deeper embedded fintech risks will become. The deeper the risk, the harder to fix. The harder to fix, the more likely the crisis next time.