Tag: Regulatory Perimeter

Big Tech, Big Macroeconomic Problems

~ Karen Petrou ~ 1 Comment

By Karen Petrou

It’s easy enough to miss the macroeconomic and financial-sector impact of giant tech-platform companies in the swirl of concern about privacy, political integrity, concentration, and corporate governance.  However, big tech also has massive macroeconomic impact with far-reaching financial-system implications.  We explored safety-and-soundness implications in here and economic-equality impact in here.  Now comes a sweeping IMF study linking and even attributing structural economic transformation to these same big-tech behemoths.  Although inconclusive in critical respects, it’s worth a careful look. Continue reading “Big Tech, Big Macroeconomic Problems” →

Hard Questions on Data Privacy

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By Karen Petrou

On February 13, bipartisan Senate Banking leadership asked for views on how best to craft a new consumer-data privacy and security framework.  Reflecting 2017’s Equifax debacle, the inquiry seems rooted in the credit-reporting framework.  Essential though it is, data-integrity fixes for the credit bureaus aren’t anywhere near sufficient protection now that consumer financial data are increasingly clutched in the hands of Facebook, Amazon, Google, and an array of lightly- or un-regulated technology-based consumer-finance providers.  As we have demonstrated, sustainable, sound, and fair consumer credit is critical to economic equality.  Continue reading “Hard Questions on Data Privacy” →

Making “Responsible Innovation” a Reality: Big Tech, Small Money, and U.S. Economic Equality

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By Federal Financial Analytics

FedFin has just released a new policy paper laying out how emerging risks in unregulated tech-based financial products may threaten U.S. economic inequality.  It’s not that regulated institutions have always done that much better, but rather that the power of big data, predictive modeling, and far-flung commercial interests combines with tech-firm culture in still more dangerous ways far outside the reach of effective controls or meaningful enforcement.  Continue reading “Making “Responsible Innovation” a Reality: Big Tech, Small Money, and U.S. Economic Equality” →

This Little Equality Goes to Market

~ Karen Petrou ~ 1 Comment

By Karen Petrou

After crafting the initial features of the post-crisis bank-regulatory framework, global and U.S. policy-makers were dumbfounded to discover that costly new rules changed the competitive financial-market balance.  Mirabile dictu, when costs rose for banks, banks changed their business model to cling to as much investor return as possible instead of, as regulators apparently expected, taking it on the chin to ensure ongoing financial-service delivery at whatever pittance of a profit remained.  As markets rapidly and in some cases radically redefined themselves, global regulators dubbed the beneficiaries of this new competitive landscape “shadow banks.”  At the most recent meeting of the FSB Plenary, they changed   shadow banks to the less stealthy moniker of “non-bank financial intermediaries.”  A new BIS working paper shortens the scope of shadow banking to “market-based finance,” going on to assess a fundamental question:  does the transformation of financial intermediation from banks to non-banks alter the income and equality landscape?  The answer:  It’s complicated. Continue reading “This Little Equality Goes to Market” →