12/1/18: S&P Global on Euronext - ISE Merger

An S&P Global article on Irish Stock Exchange - Euronext merger. With quotes from myself included. Link here: https://www.snl.com/interactivex/article.aspx?KPLT=7&id=42978341.

21/2/17: The Future of Finance

Last week I was speaking at a forum on Open Societies in Panama City. My speech covered the key threats and transformational changes in the global financial services. Here are my annotated slides:

3/12/15: Heard of Number26, yet?..

An interesting 'break-in' into Irish banking market via Number26 which uses:

• Fintech platform; and
• German license

to break the Central Bank of Ireland-led freeze on new entrants into the banking market here.

Details are here: http://techcrunch.com/2015/12/02/number26-launches-its-bank-of-the-future-in-6-new-countries/. Surprisingly low margin operation based on fees from transactions, rather than on direct customer charges. Presumably, accounts are insured by German system and are free from the Irish Government indirect tax extraction schemes, such as card duties etc... One, of course, will have to be compliant on Irish DIRT.

Of course, Fintech offers plenty of disruption potential in the sector that is inhabited by technology dinosaurs. Still, for all its promise, Fintech is yet to:

1. Achieve a significant breakthrough into traditional banking and insurance services (beyond aggregators and price optimising platforms) and
2. Deliver a viable (financially) margins model.

These two points mean that to achieve scale, Fintech offers today need deep pockets and customer bases of more traditional services providers, as I describe during this discussion: http://trueeconomics.blogspot.ie/2015/10/161015-financegoogle-2015.html.

16/11/15: IG Insights Summit: Markets Outlook

Recently, I took part at the IG Summit in Dublin on a panel covering the future direction of financial markets. Here is the link to the panel video: https://www.youtube.com/watch?v=iYFRnOCE4Mk.

My interview on the topic is available here: http://trueeconomics.blogspot.ie/2015/10/281015-flatter-growth-trend.html.

8/3/15: FinTech Entrepreneurs Reshaping Finance: Euromoney

An interesting article on FinTech developments as drivers for change in the financial services: http://www.euromoney.com/Article/3433436/Technology-The-fintech-entrepreneurs-reshaping-finance.html?LS=Twitter&single=true via Euromoney.com.

In recent months, I wrote about FinTech sector extensively for the LearnSignal blog here: http://trueeconomics.blogspot.ie/2014/11/25112014-fin-tech-unraveling-retail.html as well as digital disruption in retail banking sector: http://trueeconomics.blogspot.ie/2015/02/18215-digital-disruption-and.html plus fintech innovation on trading side: http://trueeconomics.blogspot.ie/2014/11/3112014-tech-innovation-in-finance.html

And here is a link to BBC coverage of the Irish FinTech scene: http://trueeconomics.blogspot.ie/2014/09/2692014-bbc-covering-irish-fintech.html

14/1/2015: European Banks: Permanently in the International Isolation Ward

My blog post on the declining fortunes of European banking for Learn Signal blog is available here: http://blog.learnsignal.com/?p=143

6/1/2015: The Darker Side of Sell-Side Research?

My blog post for @LearnSignal blog on the topic of conflict of interest problem with sell-side markets research: http://blog.learnsignal.com/?p=138.

12/11/2014: Traders 2.0: Emotionlessly Perfect and Perfectly Inhuman

My blogpost for Learn Signal blog on innovation in trading relating to neuro-finance is available here: http://blog.learnsignal.com/?p=117

24/5/2013: Future in Financial Services

My presentation on risks, disruptions and innovation in global financial services from earlier today

30/8/2012: Does Banking & Financial (De)regulation iImpact Income Inequality?

A new paper, titled "Bank Regulations and Income Inequality: Empirical Evidence", by Manthos D. Delis, Iftekhar Hasan and Pantelis Kazakis (Bank of Finland Research Discussion Paper 18/2012, linked here) studied the effects of financial regulations (deregulation) on income inequality in 91 countries over the period of 1973-2005.

The study yields some very interesting results (emphasis is mine):

• "In general, the liberalization policies from the 1970s through the early 2000s have contributed significantly to containing income inequality."
• "... Abolishing credit controls decreases income inequality substantially, and this effect is long- lasting."
• "Interest-rate controls and tighter banking supervision decrease income inequality; however, these effects fade away in the long term."
• "For banking supervision, the negative effect on inequality [higher supervision leads to lower inequality] is reversed in the long run, a pattern associated with stricter capital requirements that tend to lower the availability of credit". 
• "... Abolishing entry barriers and enhancing privatization laws seem to lower income inequality only in developed countries."
• "... The liberalization of securities markets {expanding securitization] increases income inequality." 

What are the policy implications of these findings?

• "Bank regulations and associated reforms aim at enhancing the creditworthiness of banks and at improving the stability of the financial sector. Several studies over the last decade show that regulations do matter in shaping bank risk (e.g., Laeven and Levine, 2009; Agoraki et al., 2009) or in affecting bank efficiency (Barth et al., 2010) and the probability of banking crises (e.g., Barth et al., 2008)."
• "Yet, what if bank regulations have other real effects on the economy besides those associated with banking stability? And, more important, what if these real effects counteract the intended stabilizing effects?"

Two issues should be considered in answering these questions:

1. "The literature on the relationship between bank regulations and financial stability is inconclusive. In fact, different types of regulation may have opposing effects on financial stability, according to the existing research."
2. "... even if we assume that bank regulations like more stringent market-discipline requirements lower banks' risk-taking appetite and enhance stability (Barth et al., 2008), the empirical findings here suggest that these effects are asymmetric and certain liberalization policies (i.e., liberalization of securities markets) or regulation policies (i.e., higher capital requirements) actually increase income inequality. That is, banks pass the increased costs of higher risks (coming from the liberalization of securities markets) and higher capital requirements on to the relatively lower-income population that lacks good credit and collateral. In other words a trade-off between banking stability and inequality may be present" [Note: this trade-off, I would argue, is most certainly a problem for Ireland today, with future borrowers operating in the environment of reduced family wealth due to property bust and financial assets depletion]. 

"Given the contemporary discussion surrounding (i) the rebirth of Glass-Steagall-type regulatory reforms as they relate to securities trading, and (ii) the discussions under Basel III to increase the risk-adjusted capital base of banks, there may be more to think about before taking those steps."

"On the good side, three clear suggestions emerge from this paper and are also consistent with the findings of Beck et al. (2010)": 

1. "... the liberalization of banking markets, primarily through abolition of credit controls, helps the poor get easier access to credit. This in turn allows them to escape the poverty trap and substantially raise their incomes." 
2. "... appropriate prudential regulation should provide less costly incentives to banks to increase regulatory discipline without hurting the relatively poor. Information technologies that would lower the cost of transparency and more effective onsite supervision that would enhance the trust in the banking system may help achieve this goal."
3. "... economies first need a certain level of economic and institutional development to see any positive effect of the abolishment of entry restrictions and privatizations on equality..."