Three catalysts are causing a fundamental reorientation of domestic and international monetary and payment systems: Facebook’s Libra, China’s central bank digital currency (the Digital Currency / Electronic Payment (DCEP) system), and the COVID-19 pandemic. These catalysts stand in stark contrast to all previous disruptions and are the focus of our new paper.
First, and crucially, each catalyst is likely to have a systemic effect on domestic and international payment systems. Second, all three systemic catalysts are operating concurrently. Third, all three are mutually reinforcing – developments and regulatory changes affecting one will often directly affect the others.
While Bitcoin … Read more
Time and time again, corporate scandals remind us of the importance of the mechanisms aimed to ensure that agents within corporations perform their tasks and duties in line with the long-term interests of their shareholders (and other stakeholders, as the case may be), rather than pursuing their immediate self-interest. This prompts the question we seek to answer in a working paper accepted for publication in the Hastings Law Journal: If laws, best practices, ethical standards, and market pressures have so far been unable to tackle this core corporate governance challenge, can technology – more precisely algorithms and data-driven machines … Read more
The impact of technology on finance (FinTech) is one of the hottest topics in business, law, and regulation, with academics and practitioners considering a host of issues that include cryptocurrencies, robo-advice, initial coin offerings, and algorithmic analyses of big data. Yet very little analysis has been devoted to the world’s largest financial industry: asset management.
The Rise of Concentrations of Digital Technology: Financial Operating Systems
In a new paper, we identify and explore a topic of major significance in FinTech: the rise of financial operating systems (FOS) and their evolution in the global asset management industry. These digital technology ecosystems … Read more
Fifty years ago, banking was a relationship business. Bank managers collected information about depositors and borrowers from all sorts of sources, formal and informal. In recent decades, credit decisions have become far more data-driven, with companies like Amazon and the Alibaba-affiliate, Ant Financial, taking the lead in the U.S. and China. This paradigm shift in finance, however, is only just beginning. We are entering a period in which the leaders in finance will have to focus intensely on data and its analysis. Banks and traditional financial institutions around the world are in the process of building ever-more sophisticated IT systems … Read more