BIS’s Carstens says we need to rethink big tech in finance should be regulated

LONDON: Agustin Carstens, general manager of the Bank for International Settlements, said Wednesday that we need to rethink how we directly regulate the activities of big tech companies in financial services given their size and influence.

Big tech companies such as Alibaba and Amazon have been involved in financial services such as banking, payments, wealth management, and insurance for some time, and some are even offering cloud computing to run key banking services.

Their size and reach on social media and e-commerce means they can quickly build market share in their financial activities, Carstens said.

This creates a “too big to fail” risk. This is a problem the regulator wanted to solve with banks after his bailout in the financial crisis more than a decade ago.

“Definitely a rethink of regulation is needed and we need to take a new path,” Carstens said in his speech, including calling for big tech financial services to be isolated from other services. He added that a new “holistic” framework is needed.Operations.

Big tech companies with significant financial activities may be subject to group-wide requirements on governance, business operations and operational resilience, he said.