Featured Product

    Erkki Liikanen of IFRS on Impact of Big Tech on Financial Stability

    December 06, 2019

    While delivering a keynote speech at the L’Agefi’s 10th Meeting of the Financial Industry, Erkki Liikanen, Chair of the Trustees of the IFRS Foundation expressed his views on whether big tech is a threat to financial stability. He noted that certain aspects of the financial system are inefficient and even outdated. The entry of big tech and fintech firms poses challenges and represents an opportunity to energize the market for payment services, credit provision, and insurance, among other services. He also shared his observations on the actions policy makers should take to deal with the resulting challenges.

    Mr. Liikanen spoke about the BIS contribution to the discussion on the role big techs. He said, "Professor Hyun Song Shin, economic adviser and head of research for the BIS, sets out both the opportunities and risks associated with big tech in finance. In his regulatory compass, the menu of policy choices can be reflected to help policymakers navigate this complex landscape." Building on the ideas of Professor Hyun Song Shin, Mr. Liikanen offered following three observations:

    • Policymakers need to decide how much to encourage big tech to enter finance—should policies promote the entry of big techs or restrict it.
    • Big tech tests the regulatory perimeters of data protection, competition policy, and now financial regulation. As such, regulation that is fit-for-purpose will require enhanced cooperation among multiple regulatory bodies. The entry of big tech into financial services requires cooperation of different regulators. Joined-up thinking is essential to achieving a regulatory environment fit for purpose.
    • There is a need to recognize the cross-border nature of the big tech and fintech challenge and respond appropriately.

    He concluded that innovation is here to stay and it will bring both benefits and challenges. However, a balanced approach is needed to reap the benefits of financial inclusion and efficiency and ensure a level playing field between big techs and banks.

     

    Keywords: International, Banking, Big Tech, Fintech, Financial Innovation, Financial Inclusion, BIS, IFRS

    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582