At least 17 years too late, the Bank for International Settlements (the central bank for central banks) has become very concerned about the impact of technology on the finance world. So concerned, in fact, that it has... produced a report for comment by the end of October. Cue another vast exercise in global regulatory group-think...
The scenario is already amusing, but the report is laugh-out-loud material. It argues persuasively for every possible outcome, like some management consulting report on e-commerce from the early days of the Internet. Some banks will survive, others won't, for at least 10 significant reasons. Choose your bank, take your pick. Though in reality every bank is probably subject to all 10 in some way or other.
Recommended actions are lofty and bland. They do not herald a departure from "same business, same risks, same rules" mantra that got the banking industry (and the broader regulated finance sector) into the current mess, nor any realisation that "fintech" doesn't represent the "same business" in the first place. In fact, we heard all the same stuff from central bankers back in April.
Never mind the obvious overall conclusion that the sector as a whole is doomed to wither for being glacially slow to adapt, brittle, hidebound and herd-like. Even central banks and BIS itself are clearly at risk. Maybe that's why some of them (and securities regulators) have now resorted to banning "initial coin offerings" of digital currencies without even being able to coherently explain why. The lack of self-awareness is hilarious.
Anything could happen, but rest assured none of the this lot will be blamed.
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