In remarks that were rather overlooked in the run-up to the Brexit vote in June, Mark Carney, the Governor of the Bank of England, talked on several FinTech topics. He mentioned five ways the Bank is enabling the FinTech transformation:
- Widening access to central bank money to non-bank Payments Service Providers
- Being open to providing access to central bank money for new forms of wholesale securities settlement
- Exploring the use of Distributed Ledger (DL) technology in the Bank’s core activities, including the operation of Real-time gross settlement systems (RTGS)
- Partnering with FinTech companies on projects of direct relevance to the Bank’s mission
- Calibrating its regulatory approach to FinTech developments
On the last topic, the Governor said “FinTech should neither be the Wild West nor strangled at birth….If FinTech enables a great unbundling of financial services, risks will change in tandem… It is about activities not labels….. Where firms or activities become systemic and risks to the real economy grow, they will come within the purview of the Bank’s responsibilities for the stability of the system as a whole…. When FinTech companies fall within our remits, we will monitor them in the same proportionate way that we approach other firms – backed by analytics and judgement, taking action where appropriate. We are building a system that allows for orderly failures. Not just to end the blatant unfairness of Too Big to Fail, but also to foster industry dynamism and better outcomes for consumers. After all, ease of exit promotes ease of entry. We won’t discourage avatars by preserving dinosaurs.”
For a full version of the remarks, please click here.