The Bank for International Settlements (BIS) warns that the financial services of large technology companies such as Facebook, Google and Amazon could bring new risks to the banking sector.
The BIS – an international financial institution An institution in Switzerland owned by 60 of the world's central banks – published a report on its position on 23 June.
In the wake of Facebook's newly announced cryptocurrency Libra, the BIS said big tech companies are on the way to financials In order to increase efficiency and improve financial inclusion, regulators need to take measures to mitigate new and complex risks strengthen.
According to BIS, large technology companies have a broad user base, access to user data, and diverse business models have the potential to rapidly change the financial services industry. The low cost structure business is highly scalable and the network structure of frequently visited platforms can help foster financial inclusion in populations that remain under the bank.
Nevertheless, the BIS warns: "The features also bring benefits that have the potential to generate new risks and costs associated with market power. "
The BIS claims that large technology companies are introducing both known and new and unknown risks to the financial services landscape.
The established issues highlight the risks to financial stability and consumer protection posed by technology giants who "have the potential to quickly emerge as systemic financial institutions" and thus the traditional banking sector and the existing structure of financial intermediation disturb.
notes that such companies are leveraging a "data network activity loop" that could accelerate the success of their entry into the Fina Nonetheless, this business model poses new and unprecedented challenges for regulators ̵
Given that companies such as Facebook override traditional regulatory boundaries and national boundaries, the BIS calls for national and international coordination between authorities to "ensure a level playing field between major technicians and banks."
As previously reported, Facebook released the White Paper on its long-awaited cryptocurrency and blockchain-based financial infrastructure project Libra on June 18th. Experiences with the Libra have so far been mixed, including ambiguous remarks by the Chairman of the US Federal Reserve and a statement by the Chairman of the Russian State Duma. Englisch: emagazine.credit-suisse.com/app/art … = 263 & lang = en – Committee on Financial Markets that the chip in Russia will not be legalized The Governor of the Reserve Bank of Australia (RBA) has now downplayed the likelihood that the balance could reach a far-reaching Usag e before relevant regulatory issues are addressed.