The Future of Bank Regulation, Risk Management, and Compliance
The book’s concluding chapter discusses the challenges to banks’ roles in credit intermediation and payment services posed by FinTech, particularly distributed ledger technology. It argues that although FinTech presents significant risks, it will ultimately not displace banks in these core economic roles. The chapter also highlights the future role of RegTech in enabling banks to establish an effective aggregate risk data and reporting infrastructure that will enable their regulators to simultaneously monitor the potential buildup of risk in individual banks and the financial system as a whole. The chapter ends with the argument that bank regulation is highly path dependent due to the international standard-setting authority of the BCBS and the homogenizing effect of the integrated financial markets. Barring another crisis, the basic structure of financial regulation is not likely to fundamentally change.