A recent Financial Stability Board report highlighted the challenges to the financial markets of new market actors we often refer to as bigtech, defined by the global financial watchdog as “established technology companies”. Specifically, the firms scrutinized in the report are: Alibaba, Tencent, Baidu, Google, Amazon, Facebook, Apple, Samsung, Microsoft, Vodafone and Mercado Libre.
A number of media reports analyzed the FSB’s report, essentially noting that a redistribution of profits from big banks to bigtech is being predicted, along with systemic risks arising from any shift of market share.
But another way to view the implications is that bigtech firms may need to seriously consider whether they are entering financial markets in a way that necessitates capital and other controls. It’s not just the FSB monitoring the situation, the Basel Committee on Banking Supervision and International Organization of Securities Commissions are also making efforts.