Financial Stability Board chairman Mark Carney has announced that global regulators are evaluating potential stability implications that emerging financial technology poses to the global financial system and hinted that a regulatory framework in some form is all but inevitable.
The announcement came in a February 22, 2016 letter from Carney to the G20 Finance Ministers and Central Bank Governors detailing the FSB’s work program for 2016. In his letter, Carney emphasizes the importance of continued progress in building resilient financial institutions and markets, a task that now requires the FSB to closely assess the “systemic implications of financial technology innovations, and the systemic risks that may arise from operational disruptions” to traditional financial institutions and infrastructure.
Regulatory framework must manage risks without stifling innovation
The FSB’s announcement acknowledges the growing importance of FinTech and regulators’ need to catch up—hopefully without stifling innovation. “The regulatory framework must ensure that it is able to manage any systemic risks that may arise from technological change without stifling innovation,” Carney wrote.
The FSB will present its initial findings at its March meeting, with next steps anticipated in April.