All Articles Finance Modern Money While You Were Working - August 31

While You Were Working – August 31

The BIS on fintech, Wells Fargo CEO at risk, blockchainitis, and World Cup qualifiers

3 min read

By Sean McMahon 08/31/17

Modern Money

Tim Sloan

A second Wells Fargo CEO is on the hot seat over fake accounts. (Rob Lever/AFP/Getty Images)

The BIS weighed in on fintech

The Bank for International Settlements put forth a consultative paper covering fintech developments for banks and regulators. It is a deep-dive on all the good, the bad and ugly that fintech might spawn.

The document includes 10 key observations and recommendations:

  1. the overarching need to ensure safety and soundness and high compliance standards without inhibiting beneficial innovation in the banking sector;
  2. the key risks for banks related to fintech developments, including strategic/profitability risks, operational, cyber and compliance risks;
  3. the implications for banks of the use of innovative enabling technologies;
  4. the implications for banks of the growing use of third parties, via outsourcing and/or partnerships;
  5. cross-sectoral cooperation between supervisors and other relevant authorities;
  6. international cooperation between banking supervisors;
  7. adaptation of the supervisory skillset;
  8. potential opportunities for supervisors to use innovative technologies (“suptech”);
  9. relevance of existing regulatory frameworks for new innovative business models; and
  10. key features of regulatory initiatives set up to facilitate fintech innovation. 

Could the fake account scandal cost Wells Fargo 2 CEOs?

Wells Fargo warned a while back that the number of fake accounts on its books was likely to grow. But in announcing today that the number grew from 2.1 million to 3.5 million, the bank opened up its current management team to the kind of increased scrutiny that could cost them their jobs.

Now the focus will be on what executives told policymakers when the scandal first broke nearly a year ago. To be off by such a huge margin begs the question of what the execs knew and when they knew it. For example, is Wells Fargo too-big-to-manage ethically?

And it’s not like current CEO Tim Sloan was brought in from the outside to clean things up. He has been there the whole time, so some of stink lingers on him appropriately. The funny thing is that murmur as far back as last winter suggested Sloan was tired of talking about the fake accounts. He was keen to move on and advance the conversation to growing the bank and other happier topics. Sorry Tim, that ain’t gonna happen.

Blockchainitis

Amid all the hype and hoopla about how blockchain technology – aka distributed ledger technology – is going to change the world, it is pretty funny that one of the earliest usages on Wall Street will be the ability for banks to pay each other.  

This is funny

Is Arsene Wenger the Theresa May of soccer? Or is Theresa May the Arsene Wenger of politics? Maybe both.

WYWW Appetizers