WASHINGTON—A new report suggests unregulated fintech companies could set the stage for another financial crisis.
According to a new research paper by Karen Petrou of Federal Financial Analytics, unregulated fintech could precipitate another major market crash, Inside Sources reported.
“Given that (fintech) is almost entirely unregulated with regard to resilience, recovery, conflicts of interest, monopoly power, and pretty much everything else, this changing landscape poses significant risk from exactly the same vulnerabilities that sparked the last debacle and, even more worrisome, from new ones. As a recent paper observes, virtualizing financial risk by housing it in fintech companies does not change the fundamental nature of actual risk,” Petrou wrote.
As CUToday.info reported, the House of Representatives will hold a hearing this Friday examining opportunities in the financial space for fintech.
At the end of July, the Office of the Comptroller of the Currency announced it would accept applications from fintech companies seeking a national bank charter. Petrou emphasized that fintech regulation should not be postponed.