FinTech, Big Tech and the Safety of the Banking System

Keeping the US banking system safe and stable has been a persistent challenge for policymakers. Over the past 150 years, Congress has enacted several measures to strengthen the legal and regulatory framework for banks in response to episodic banking crises, and through its actions, deepened the social compact with banks.

Through the passage of laws like the

Congress articulated a clear view that to enjoy the benefits of being a bank – the right to accept deposits, lend and process payments with the benefit of the federal safety net (FDIC insurance or access to the discount window) –banks are expected to act prudently and comply with a meaningful regulatory and supervisory framework. 

Unfortunately, the safety and stability of our system is at risk as technology companies seek to act more and more like banks, but without adhering to a prudential framework. They seek all the benefits of being a bank without taking on the duties and responsibilities that come along with it.

Banking is safe, strong and stable. Keep it that way.

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