The Regulatory Future

Jan Kregel

Working papers from Financialisation, Economy, Society & Sustainable Development (FESSUD) Project

Abstract: New lending and payment systems challenge traditional banks by splitting the two sides of the balance sheet into separate operations, leaving traditional regulated institutions as the bridge between the two. They thus also represent a potential challenge to the existing regulatory system designed for traditional deposit banking. None of these payment systems are themselves subject to prudential regulation, although they have linkages to parts of the formal financial system that are regulated in different ways. This raises the question of whether these new developments are increasing the efficiency and stability of the financial system. The new payments systems have the ability to evade or distort the regulation on the liability side of financial institutions, while the p2p system replace the due diligence of bank loan officers and bank supervisors with computer algorithms. It is for this reason these system will be the major challenge to the future regulation of the financial system

Keywords: Financial regulations; regulatory foresight; Hyman P. Minsky; Henry Kaufman; financial innovation; payment and lending systems; P2P (search for similar items in EconPapers)
JEL-codes: G18 G21 G23 G28 O16 O31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-06-30
New Economics Papers: this item is included in nep-pay and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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