Regulating and supervising BigTech in finance

José Manuel González-Páramo

Chapter 15 in Central Banks and Supervisory Architecture in Europe, 2022, pp 181-193 from Edward Elgar Publishing

Abstract: The presence of BigTech platforms in finance brings potentially many benefits: cost reductions, higher productivity, financial inclusion, tailoring of products to clients and convenience. However, this is just one part of the story. Unlike FinTech, BigTech activities may end up impairing competition in the medium to long term, as well as harming consumer protection, market integrity and financial stability. If these risks materialize, BigTech may end up reducing welfare. The two main drivers behind this potential outcome are BigTech's business model, and regulatory and supervisory asymmetries. The significant increase of BigTechs' economic dominance has triggered doctrinal and policy debates that are coalescing around a new approach to competition policy, with entity-based proposals of various types. These initiatives pave the way to significant changes in the approach through which large digital platforms are regulated and supervised in finance. Albeit currently financial services represent only a small fraction of their revenues, BigTechs' influence goes much beyond that, as they offer also non-financial services which are essential for all financial competitors. And they could very quickly become too big to fail. Removing the most critical regulatory asymmetries which hinder the attainment of authorities' objectives calls for strengthening fundamental horizontal regulations -in particular, operational resilience- as well as treating BigTechs as entities performing financial and non-financial roles of crucial importance for financial and economic stability.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781802208894/9781802208894.00023.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:21354_15

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().