Stock Groups

Regulators lack understanding of banks’ digital marketplaces, EU watchdog says By Reuters


© Reuters. FILEPHOTO: Flags of the European Union fly in front of Brussels’ EU Commission headquarters, Belgium on May 5, 2021. REUTERS/Yves Herman/File Photo

LONDON (Reuters) – Regulators have little understanding of risks from banks setting up digital marketplaces and need a framework for spotting potential contagion if things go wrong, the European Union’s banking watchdog said on Tuesday.

The concept of platformisation means that banks create a digital market place for their services and products. It is part of wider digitization of finance, which has increased since the Pandemic.

It said that relying on digital platforms for distribution and marketing of services can lead to new financial, operational, and reputational interdependencies.

Although new legislation is not required at the moment, this trend poses “some challenges” to regulators when it comes to monitoring market developments as well as any interdependencies.

EBA noted that it appeared the majority of relevant authorities have limited knowledge of platform-based model business models.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs include futures, stocks, indexes and Forex. Prices are provided not by the exchanges. They are determined by market makers. Therefore, prices can be inaccurate and differ from actual market prices. These prices should not be used for trading. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.