Rethink needed to regulate Big Tech in finance, says BIS’ Carstens

LONDON :A rethink is needed on how to directly regulate activities of Big Tech companies in financial services given their size and influence, Bank for International Settlements General Manager Agustin Carstens said in Wednesday.

Big Tech companies such as Alibaba and Amazon have been involved for some time in financial services such as banking, payments, asset management and insurance, with some also providing cloud computing to run key services for banks.

Their size and reach in social media and e-commerce means they can quickly build up market share in financial activities, Carstens said.

This creates a risk of them becoming “too big to fail” – a problem regulators hoped they had solved with banks after bailouts in the financial crisis over a decade ago.

“Without a doubt, a regulatory rethink is warranted, and we need a new path to follow,” Carstens said in a speech, adding a new “holistic” framework was needed that included requiring Big Tech financial services to be ring-fenced from other operations.

Big Tech firms with significant financial activities could also be subject to group-wide requirements on governance, conduct of business and operational resilience, he said.