Archive for the ‘Blog’ Category:

Part I – The Upcoming European Banking Crisis

How resilient are the largest banks of the eurozone? We looked at their balance sheets and recent stress test results in great detail. What we have found out is not reassuring.


The coronavirus pandemic might trigger a severe economic shock. Will the European banking system withstand this storm? (Photo: lenalindell20)


The coronavirus pandemic struck Europe completely unprepared. The old continent ignored the key lesson that Asian countries like South Korea, Singapore, or Hong Kong learned when dealing with SARS in 2003: You better be prepared.


When a new virus spreads, it is all important to act as fast and as determined as you possibly can. The same lesson applies when your banking system is collapsing.



How banking regulation has grown out of all proportions

Over the last forty years, banking regulation has grown extensively. The framework developed by the Basel Committee on Banking Supervision alone consists of two million words. What is actually stated in all these documents?


For our data analysis, we parsed more than 163 regulatory documents issued by the Basel Committee on Banking Supervision.



What will happen after the next financial crisis?

Three scenarios for our financial system in 2050 – told by the fictional story of Ivo Salvini, who started his career in a fintech startup in 2018.


Where is the financial world heading to? Find out in our three scenarios for 2050. (Photo: composita)


Banking regulation moves closer towards peak complexity

Basel III just keeps on giving: The global framework for banking regulation is already extremely complex. Newly presented rules will complicate matters further.


This is what global banking regulators believe in: More rules, more complexity, and less transparency. (Photo: Fotomek)


Basel III is the name of the global framework for banking regulation. It is the reaction of regulators around the world to the financial crisis of 2007/08. Even ten years after the crisis, the work on Basel III is still ongoing. Yesterday, a so-called “output floor” was added. The new rules should prevent banking institutions from abusing their internal risk management models to overstate the size of their capital ratios.



Coming Soon – The End of Banking in seven languages

There are some exciting news to share. We have teamed up with publishers around the world to get The End of Banking translated.


Coming soon, the German edition of The End of Banking (Photo: Campus)



Regtech: Regulators will miss the Frisbee once again

Complexity of financial regulation is exploding. The underlying causes are still not addressed. Instead, regulators want to use technology to keep the inextricable regulatory framework under control – an approach that is doomed to fail.


Catching a Frisbee is hard, regulating banking in the digital age impossible (Photo: 825545)

Information technology wouldn’t have helped much to catch this Frisbee (Photo: 825545)


“The Dog and the Frisbee”: This was the title of a speech by Andrew Haldane. Already a few years ago, the economist of the Bank of England complained about the ever growing complexity of financial market regulation. He used the image of a dog who wants to catch a Frisbee. The exact calculation of the trajectory requires an understanding of complex physical relationships. Nevertheless, a Border Collie is quite good in catching the flying disc. The dog just follows simple rules of thumb.



Why Fintech needs a license to disrupt finance

Financial regulation treats banks as protected species. This prevents long overdue structural change. The way forward is a fintech license. But current proposals, such as the latest one by the Swiss government, are not comprehensive enough.


The financial industry will not get disrupted if regulators continue to protect banks

The financial industry will not get disrupted if regulators continue to protect banks.


The digital revolution causes sleepless nights among managers of the “old economy”. Successful business models are increasingly disrupted by the geeks from Silicon Valley. People do no longer hail cabs, they Uber, and travel offices have become rare and deserted places. However, one industry has resisted successfully the disruption from digitalized competitors so far: the financial industry. The very same banks that have existed one hundred years ago still dominate the financial sector.


One of the Top 5 Books to Learn About the Banking Industry

We are proud that The End of Banking has been selected as one of the top five books to learn about the banking industry. You find the full list on the website of Investopedia.

“The End of Banking offers an intriguing look into the financial future” (Source: Investopedia/own illustration)

“McMillan carefully details what he sees as ultimately unsolvable problems confronting the current banking system, and then offers a plan for a new type of banking system…” (Source: Investopedia/own illustration)

Jonathan McMillan calls for the End of Banking in London

Will Fintech overthrow the forces that crashed our financial system? Readers of our book know: not if we do not fundamentally change the way how we organize money and credit. 



End banking, free finance!


The investment banker will make his way to London and explain why the end of banking is the only response to fix finance in the digital age. Join him on the 10th of September, 2pm, in the Birckbeck college in London. Buy your tickets here



Fintech Revolution in the United Kingdom

Yes, it is all about Brexit these days. Beyond doubt, it will shape international politics for the years to come. But silently, another revolution took place in the UK that did not get the attention it deserves.


Can you hear the wisper of revolution in the city of London?

Can you hear the wispers of revolution in the city of London?


The Bank of England announced that it will allow non-bank payment service providers access to the real-time gross settlement system. After centuries of exclusive access to central bank reserves, commercial banks will now share this access with the growing Fintech community. We are really excited about this regime change, and here is why: