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The Systemic Risks and Regulation of BigTech - "Too Big(Tech) to Fail?"

Author

Listed:
  • Roland Bodi

    (Magyar Nemzeti Bank)

  • Peter Faykiss

    (Magyar Nemzeti Bank, Corvinus University of Budapest)

  • Adam Nyikes

    (Magyar Nemzeti Bank)

Abstract

When it comes to systemically important financial institutions, people usually think of banks, insurers or financial holding companies, but large technology firms (so-called BigTech) are increasingly part of this category. This paper examines regulatory approaches with which the systemic importance of BigTech firms in financial services could be addressed. According to the analysis, of the three regulatory frameworks identified in the literature ("restriction", "segregation", "inclusion"), when a balanced approach is used, the separation of financial and non-financial activities seems to be the most promising regulatory solution, as this model works best for taking account of the practical aspects of operation, regulation and supervision.

Suggested Citation

  • Roland Bodi & Peter Faykiss & Adam Nyikes, 2023. "The Systemic Risks and Regulation of BigTech - "Too Big(Tech) to Fail?"," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 22(1), pages 5-20.
    • Handle: RePEc:mnb:finrev:v:22:y:2023:i:1:p:5-20
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    File URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-22-1-ove1-bodi-faykiss-nyikes.pdf
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    Citations

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    Cited by:

    1. Curcio, Domenico & D’Amico, Simona & Gianfrancesco, Igor & Vioto, Davide, 2024. "Understanding the impact of the financial technology revolution on systemic risk: Evidence from US and EU diversified financials," Research in International Business and Finance, Elsevier, vol. 69(C).

    More about this item

    Keywords

    BigTech; FinTech; systemic risk; financial stability; financial regulation;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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