Financial Regulation Archives - Lion and Palm Tree

Fintech and Financial Stability

A critical look at IMF recommendations on financial stability concerns from Fintech and DeFi

Decentralized Finance — Photo by Shubham Dhage on Unsplash

Fintech and financial stability

Fintech is technological innovation in financial activities, or in other words, financial innovation aided by technology. This by itself is not new. The ATMs which made their entry in the late 1960s was also in this sense, fintech. With the rapid growth in crypto assets in recent years, and that of decentralised ledger technology (DLT), fintech has evolved and grown rapidly in recent years to provide traditional banking functions, including deposit taking and lending. Referred to as Decentralized Finance, or DeFi for short, it threatens to disintermediate banks from savers and borrowers, transform the traditional banking landscape, and threaten financial stability. The IMF flagged its concerns in the third chapter of the April 2022 issue of its biannual Global Financial Stability Report (GFSR). Continue reading “Fintech and Financial Stability”

The Swedbank case

Out of the several money laundering cases in recent years, two of the most disturbing were those of Danske Bank and Swedbank, mainly because they were headquartered in Nordic countries where such cases were rare. Moreover, these countries are known for high standards of living, and very low levels of crime and corruption. Continue reading “The Swedbank case”

The Wirecard Scandal

Germany is not particularly known for corporate scandals. Unlike the USA or UK. Or the rest of Europe. The last big one was Volkswagen. But, one involving Wirecard, the payment processing firm with a global footprint, has been unravelling over the last one week, since Ernst & Young (EY), the company’s auditors, announced that it could not find USD 2.1 billion (Euro 1.9 billion), roughly a quarter of the balance sheet size. This is a first for the DAX, a 30-member index trading on the Frankfurt Stock Exchange. Continue reading “The Wirecard Scandal”