Download publication

Policy Contribution

Capital Markets Union and the fintech opportunity

Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Policymakers need to consider four questions urgently: Develop a European or national fintech market? What regulatory framework to pursue? Should supervision of fintech be exercised at the European level? What is the overall vision for the EU’s financial system?

By: , and Date: September 15, 2017 Topic: Finance & Financial Regulation

Complementing Europe’s bank-based system with deeper capital markets and more cross-border financial integration promises benefits, but despite long-running debate and policy action, financial system change remains slow.

Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Lower costs and potentially better consumer experiences could be the driving forces.

However, empirically, fintech remains at a small scale, especially in the European Union. Even the largest fintech market, in China, is of marginal size compared to overall financial intermediation. In the EU, much of fintech is concentrated in the United Kingdom.

We argue that policymakers need to consider four questions urgently: (1) Develop a European or national fintech market? (2) What regulatory framework to pursue? (3) Should supervision of fintech be exercised at the European level? (4) What is the overall vision for the EU’s financial system? Getting the answers to these questions right at an early stage of market development would be an opportunity to shape a stable and cost-efficient financial system. In contrast, late action could mean that Europe loses out to foreign competitors and misses an opportunity to improve financial intermediation in Europe.

View comments
Read article More by this author

Opinion

The world deserves a more effective G20

As the presidency shifts from Argentina to Japan at Buenos Aires (and then to Saudi Arabia) it is worth asking why the G20 has endured this long and what it needs to remain relevant in a dramatically changed world.

By: Suman Bery Topic: Finance & Financial Regulation, Global Economics & Governance Date: November 29, 2018
Read about event More on this topic

Past Event

Past Event

How to speed up sustainable finance?

Which steps are needed to really change current practices and speed up sustainable finance?

Speakers: Sophie Barbier, Molly Scott Cato, Cathrine de Coninck-Lopez, Alain Deckers, Edmund Lakin and Dirk Schoenmaker Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 28, 2018
Read about event More on this topic

Past Event

Past Event

Competition policy for the digital age

How can competition policy adapt to market changes caused by new technologies, digital platforms and big data companies?

Speakers: Ana Botin, Riccardo Falconi, Jorge Padilla, Tommaso Valletti and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 21, 2018
Read about event More on this topic

Past Event

Past Event

EU Financial Markets: East Meets West

Banking and financial regulation in the East and the West: links, differences and future.

Speakers: Nicolas Véron Topic: Finance & Financial Regulation Location: Collegium Iuridicum II, Lipowa 4, Hall A3, Warsaw, Poland Date: November 16, 2018
Read article More on this topic More by this author

Blog Post

US mid-term elections and the global economy

Democrats won control of the House and Republicans held onto the Senate in the most consequential US mid-term elections in decades. Bowen Call reviews economists’ and scholars’ analyses of the impact this might have on the world economy.

By: Bowen Call Topic: Global Economics & Governance Date: November 12, 2018
Read article More on this topic More by this author

Opinion

The global economy’s three games

In this column, Jean Pisani-Ferry portrays the current international economic and geopolitical order as increasingly reminiscent of chess. Three key players: the US, China and a loose coalition of the other G7 members play three games simultaneously, and no one knows which game will take precedence.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: October 29, 2018
Read article More on this topic More by this author

Opinion

How could Europe benefit from the US-China trade war?

Under pressure from the US, Beijing is set to be more open to making new allies.

By: Guntram B. Wolff Topic: Global Economics & Governance Date: October 18, 2018
Read article More on this topic More by this author

Podcast

Podcast

Backstage: The new balance of Asia-EU-US trade relations

Amid the Asia-Europe Economic Forum on the fringes of the 12th ASEM Summit, Bruegel senior fellow hosts a conversation on developing global trade relations, with guests Moonsung Kang, professor as Korea University, and Michael G. Plummer, director at SAIS Europe – Johns Hopkins University, for an episode of the Bruegel Backstage series on ‘The Sound of Economics’.

By: The Sound of Economics Topic: Global Economics & Governance Date: October 17, 2018
Read article More on this topic More by this author

Opinion

Global markets’ tepid reaction to China’s new opening

China’s accession to the World Trade Organisation in 2001 was greeted with great fanfare. But near silence has greeted the recent removal by the China Banking and Insurance Regulatory Commission of caps on foreign ownership of Chinese financial institutions. For Beijing, the apparent lack of interest might be an issue of too little, too late.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: October 11, 2018
Read article More on this topic More by this author

Opinion

Ten years after the crisis: The West’s failure pushing China towards state capitalism

When considering China’s renewed state capitalism, we should be mindful of the damage done by the 2008 financial crisis to the world's perception of Western capitalism.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: October 10, 2018
Read article Download PDF More by this author

Parliamentary Testimony

Belgian Federal ParliamentCroatian Parliament

Transatlantic relations

Testimony before the Belgian Federal Parliament ( La commissions des Relations extérieures de la Chambre des représentants )

By: Maria Demertzis Topic: Belgian Federal Parliament, Croatian Parliament, Testimonies Date: September 27, 2018
Read article More on this topic More by this author

Blog Post

Inequality in China

After amply discussing income inequality in Europe and the US, economists are now looking at the magnitude, implications and possible remedies for this phenomenon in the context of the Chinese economy.

By: Silvia Merler Topic: Global Economics & Governance Date: September 24, 2018
Load more posts