Featured Product

    FSB Report Examines Impact of Pandemic on Market Structure

    March 21, 2022

    The Financial Stability Board (FSB) published a report that discusses the impact of COVID-19 on market structure as well as the associated implications for financial stability.

    The report examines whether the COVID-19 pandemic changed the ways in which individuals and firms engage with innovative financial service providers and traditional financial incumbents. The report outlines the types of actions (related to financial stability, competition, data privacy and governance issues) authorities have taken during the pandemic that may impact market structure and the role of different firms in providing digital financial services. The report also stresses the importance of cooperation between regulatory and supervisory authorities, including those charged with overseeing the bank and non-bank sectors, and where relevant, with competition and data protection authorities. The report discusses:

    • bigtech and fintech firms’ expansion into financial services that could bring benefits such as improved cost efficiencies and wider financial inclusion for previously underserved groups. It also cautions over the potential for market dominance
    • negative financial stability implications from dependence on a limited number of bigtech and fintech providers in some markets, the complexity and opacity of their partnership activities, and potential incentives for risk taking by incumbent financial institutions to preserve profitability
    • consumer protection risks from greater dependency on technology as well as the impact of operational vulnerability stemming from the limited number of cloud service providers
    • need to address data gaps that hamper the assessment of bigtech firms’ financial risks and systemic importance
    • benefits from accelerated digitalization of financial services during the pandemic and whether those observed changes may be structural or revert back to pre-pandemic levels once conditions normalize
    • parallel international work on third-party dependencies of the financial sector, for instance, in cloud computing

    The report concludes that the pandemic has accelerated the trend toward digitalization of retail financial services. The growth of bigtech firms in particular may give greater urgency to financial stability issues previously discussed, such as the potential for greater systemic importance of new players that may not be subject to financial regulation. This underscores the need to address data gaps that hamper the assessment of the financial risks and systemic importance of bigtech firms. Such data gaps make it difficult for authorities to decide whether and how to include bigtech firms in the regulatory perimeter.


    Related Links


    Keywords: International, Banking, Fintech, Covid-19, Bigtech, Financial Stability, Data Privacy, Governance, Regtech, Suptech, Systemic Risk, Digitalization, API, Cloud Service Providers, FSB

    Featured Experts
    Related Articles

    EBA Sets Out Roadmap for 2023, Updates Reporting Framework 3.2

    The European Banking Authority (EBA) published its work program for 2023 as well as the technical package for phase 3 of version 3.2 of its reporting framework.

    September 30, 2022 WebPage Regulatory News

    FED Announces Launch of Climate Scenario Analysis Exercise in 2023

    The Board of Governors of the Federal Reserve System (FED) announced a pilot climate scenario analysis exercise for six largest banks in the U.S.

    September 29, 2022 WebPage Regulatory News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8523