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World Economic Forum wants to regulate fintech like oldtech

April 19, 2016

Oh god! Oh god! How weary, stale, flat, and unimaginative. Seem to us all the measures proposed by the World Economic Forum – but enough Shakespeare, let’s talk about how to regulate fintech.

 

Narrow-minded view on the financial sector - a WEF-report disappoints (Photo: )

The latest WEF report shows a rather narrow-minded view on financial technology (Photo: Anthony Delanoix)

 

“The financial sector is at an inflection point,” one can read in a recent report by the World Economic Forum (WEF). Over the past decades, some financial institutions had risen to global too-big-to-fail giants. At the same time, young tech-companies have begun to disintermediate the value chain of traditional banks.

 

It is a potentially explosive mixture.

 

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The End of Alchemy by Mervyn King – a Critical Book Review

April 12, 2016

How can we prevent another financial crisis? In the End of Alchemy, Mervyn King presents new ideas to fix finance. The proposals of the former central banker are surprisingly ill-designed.

 

The central bank as the Leviathan of modern economies? How Mervyn King’s End of Alchemy would put our fate into the hands of central bankers. (Photo: The frontispiece of the book Leviathan by Thomas Hobbes; engraving by Abraham Bosse)

The creation of all-powerful central banks – how Mervyn King tries to solve today’s problem with banking in The End of Alchemy. (Photo: The frontispiece of the book Leviathan by Thomas Hobbes; engraving by Abraham Bosse)

 

“Without reform of the financial system, another crisis is certain.” This sounds like a statement from one of the numerous doom and gloom prophets. But no, you find these words in The End of Alchemy: Money, Banking, and the Future of the Global Economy. The author of the book is Mervyn King, known as the governor of the Bank of England who handled the financial crisis of 2007-08.

 

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The End of Banking: Q&A with Jonathan McMillan

March 17, 2016

What is the first step to end banking and free finance? In an interview with Cat Johnson from Shareable, Jonathan McMillan replies: “We have to abandon the belief that banking is an indispensable of our world. Everything else will follow.”

 

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“You cannot imagine how far apart economic theory is today from practice in finance” (Photo: Philipp Henzler)

 

Read the full interview here.

 

 

Reflections on banking regulation

January 7, 2016

A guest post by John Nugée Ever expanding regulation will not reinstate good behaviors in the world of finance. To the contrary, more and more rules bear the risk that banking becomes a business without any moral basis at all. It is time to reflect about what went wrong and explore new ways to fix finance.

 

"If you make ten thousand regulations you destroy all respect for the law" (Winston Churchill)

“If you make ten thousand regulations, you destroy all respect for the law” (Winston Churchill; Photo: US Library of Congress)

 

A year-end is always a good time for reflection. And as 2015 draws to a close, it is an opportunity, after a year of considerable central bank activity which culminated in a US interest rate increase, to reflect on the state of the global banking system.

 

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Fintech Must Lead the Way to Free Finance

December 3, 2015

Fintech companies can bring our financial system to the next level – but only if they disrupt finance on the regulatory level as well. Here is how they should proceed.

 

Revolution

Being better is not enough. Fintech should open up the regulatory game, otherwise it will fail to disrupt finance! (picture by wolter_tom)

 

Only a couple of years ago, Fintech entrepreneurs wanted to become a disruptive force. Ambitious startups had the vision to democratize finance and break the power of banks. About five years ago, Renaud Laplanche, CEO of Lending Club, hoped companies like his could eventually replace traditional banks.

 

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10 Best Fintech Books: The End of Banking has made it to the list!

December 1, 2015

We are proud that The End of Banking has been selected as one of the ten Best Fintech Books. You find the full list at the website of Fintech Singapore.

 

"Alongside offering the main problems of our financial world, The End of Banking also provides solutions to move forward into a modern financial system."

“Alongside offering the main problems of our financial world, The End of Banking also provides solutions to move forward into a modern financial system.” (Source: fintechnews.sg)

 

The small bug that crashed our economic system

November 5, 2015

Regulators came up with a long list of contributing factors to the financial crisis of 2007-08. But what if all these factors are only symptoms of one underlying, much more fundamental issue?

 

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Deutsche Bank recognized that for 31 billion Euros of recorded assets, it lacks fundamental information for a precise valuation. Can we still trust in the accounting of limited liability companies? (Photo: geralt)

 

In this article, we want to draw your attention to a seemingly small flaw in the design of our economic architecture. One that did not matter for a long time, but that has become extremely destructive over the past decades. The most recent banking crisis is a direct consequence of this flaw, and if we do not deal with it, we will have to live with an increasingly fragile financial system. The issue we are talking about has been hard coded in an underestimated but critical component of our economy’s operating system: Limited Liability.

 

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Book of the Year Award!

September 16, 2015

We are pleased to announce that The End of Banking has been honored with a Book of the Year award by Foreword Reviews – time for us to look back on the past 10 months since publication.

 

We were in it to win it, and we did! Very happy to announce that we won a Book of the Year Award by Foreword

We were in it to win it – and we did it! Happy to announce that we won a Book of the Year Award by Foreword.

 

What has started in a London Pub four years ago has reached another major goal. The End of Banking has been honored with a Book of the Year award by Foreword Reviews. For us, this was another great step forward. We are happy to look back on the past 10 months, which have offered many highlights.

 

Let us revamp what has happened since publication.

 

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The Secret for Stellar Banking Profits

August 27, 2015

We all have become deeply accustomed to the fact that banks are among the most profitable companies. Many perceive the success of banking as something magic. In fact, it is based on a surprisingly simple trick.

Profitable banks as symbols for capitalism? Bank CEO’s as advocates for less government interventions? Oh, please...

Profitable banks as symbols for capitalism? Bank CEO’s as advocates for less government interventions? Oh, please… (Photo: jorgophotography)

 

Why is Apple among the most profitable companies on this planet? The answer is simple: Apple sells popular products. Some people might have difficulties to understand the religious zeal of Apple customers, but even Apple skeptics can easily understand why Apple is one of the most successful companies on this planet.

 

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Regulating Fintech: Getting the Response Right

August 4, 2015

Recent developments in finance challenge regulators around the world. Fintech companies are on the rise, and it is not clear what kind of new rules are needed. To shed light on these issues, one of the authors behind Jonathan McMillan gave a speech at the GovKnow conference on “The Future of Financial Services – Governance, Regulation and Accountability” in London.

Mind the regulatory gap between traditional banks and fast moving Fintech companies. (Photo: i am jae)

Mind the regulatory gap between banks and fast moving Fintech companies. (Photo: i am jae)

 

First of all, I’d like to thank you for this opportunity to discuss some perspectives on financial regulation in the digital age. In my view, this is a topic that has not yet received the attention it deserves. So let’s get right into it.

 

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