Bank of Japan President Yoshihiko Kuroda said Thursday that financial technology companies could cause serious damage to the banking system in developed economies.
"We tend to think that these big technology companies are having a devastating impact on the banking system," he said at the World Economic Forum, noting that many countries are trying to revise financial regulation accordingly.
Big technology companies tend to focus on payment and settlement rather than on storage and lending, he said. In his view, these enterprises "could seriously undermine the banking system. How to deal with this situation is a very difficult problem.
The central banks of developed countries seek to prevent financial crisis by supervising the traditional banking industry. However, the dramatic changes in financial technology are introducing new technology enterprises into the financial industry, leading to greater and greater challenges for regulation.
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