Featured Product

    IMF Director on Fintech Implications for Central Banks and Regulators

    September 29, 2017

    The IMF Managing Director Christine Lagarde spoke at the Bank of England Conference in London. She examined the ways in which fintech will change central banking over the next generation, while considering the possible impact of three innovations—virtual currencies, new models of financial intermediation, and artificial intelligence.

    Ms. Lagarde discussed the potential for virtual currencies to provide better value and better payment services, the transformative effect of developments in artificial intelligence, and the regulatory implications of new models of financial intermediation. She highlighted that central banks typically affect asset prices through primary dealers, or big banks. However, if these banks were to become less relevant in the new financial world and if demand for central bank balances were to diminish, the “central banks may well have to increase the number of counterparties to their operations. The Bank of England is already leading the way by including large broker-dealers and central counterparty clearing houses.” These factors have regulatory implications. More counterparties imply more firms falling under the central bank’s regulatory umbrella. In this context, regulating shadow banks looks all the more pressing and FSB has already made progress in this area, she added.

    She opines that “We may also see a shift in regulatory practices,” as a result. “The regulators will likely have to further expand their focus, from financial entities to financial activities—while possibly also becoming experts in assessing the soundness and security of algorithms.” To facilitate this, international cooperation is necessary, along with dialog between experienced regulators and those regulators that are just beginning to tackle fintech. Dialog is also important among policymakers, investors, and financial services firms. “Reaching across borders will be critical as the focus of regulation widens—from national entities to borderless activities, from your local bank branch to quantum-encrypted global transactions. Because of our global membership of 189 countries, the IMF is an ideal platform for these discussions. I am convinced that the IMF has a strong role to play in this respect. But the Fund will also have to be open to change, from bringing new parties to the table, to considering a role for a digital version of the SDR,” said Ms. Lagarde.

     

    Related Link: Speech

    Keywords: International, Banking, Fintech, Regtech, Central Banks, Financial Intermediation, IMF

    Related Articles
    News

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Consult on Policy Statement on Allowance for Credit Losses

    US Agencies (FDIC, FED, NCUA, and OCC) are consulting on the policy statement on allowances for credit losses and on the guidance on credit risk review systems.

    October 17, 2019 WebPage Regulatory News
    News

    FSI Paper Examines Use of Suptech Initiatives by Financial Authorities

    The Financial Stability Institute (FSI) of BIS published a paper that examines the suptech developments by analyzing suptech initiatives of 39 financial authorities globally.

    October 17, 2019 WebPage Regulatory News
    News

    FSB Report Examines Implementation and Impact of G20 Financial Reforms

    FSB published fifth annual report on the implementation and effects of the G20 financial regulatory reforms.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Launches Consultation on Comprehensive Pillar 3 Disclosures

    EBA proposed the new comprehensive implementing technical standard (ITS) for public disclosures by financial institutions.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Consults on Revised Technical Standards on Supervisory Reporting

    EBA launched a consultation on the revised implementing technical standards, or ITS, on supervisory reporting.

    October 16, 2019 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel Framework

    BCBS published the seventeenth progress report on adoption of Basel regulatory framework.

    October 16, 2019 WebPage Regulatory News
    News

    BoE and FCA Examine Use of Machine Learning in Financial Sector in UK

    BoE and FCA published a report on the results of a joint survey by BoE and FCA in 2019 to better understand the use of machine learning in the financial services sector in UK.

    October 16, 2019 WebPage Regulatory News
    News

    FSB Report Examines Implementation of OTC Derivative Reforms

    FSB published annual progress report on implementation of the agreed G20 reforms for over-the-counter (OTC) derivatives markets.

    October 15, 2019 WebPage Regulatory News
    News

    APRA Proposes Measures to Strengthen Capital for Bank Depositors

    APRA proposed changes to APS 111, which is the prudential standard on measuring capital adequacy and establishes the criteria for regulatory capital requirements of authorized deposit-taking institutions.

    October 15, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3981