New Tech v. New Deal: Fintech as a Systemic Phenomenon.

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  • Author(s): Omarova, Saule T.
  • Source:
    Yale Journal on Regulation. Summer2019, Vol. 36 Issue 2, p735-793. 59p.
  • Document Type:
    Article
  • Additional Information
    • Subject Terms:
    • Abstract:
      Fintech is the hottest topic in finance today. Recent advances in cryptography, data analytics, and machine learning are visibly " disrupting" traditional methods of delivering financial services and conducting financial transactions. Less visibly, fintech is also changing the way we think about finance: it is gradually recasting our collective understanding of the financial system in normatively neutral terms of applied information science. By making financial transactions easier, faster, and cheaper, fintech seems to promise a micro-level "win-win " solution to the financial system's many ills. This Article challenges such narratives and presents an alternative account of fintech as a systemic, macro-level phenomenon. Grounding the analysis of evolving fintech trends in a broader institutional context, the Article exposes the normative and political significance of fintech as the catalyst for a potentially decisive shift in the underlying public-private balance of powers, competencies, and roles in the financial system. In developing this argument, the Article makes three principal scholarly contributions. First, it introduces the concept of the New Deal settlement in finance: a fundamental political arrangement, in force for nearly a century, pursuant to which profit-seeking private actors retain control over allocating capital and generating financial risks, while the sovereign public bears responsibility for maintaining systemic financial stability. Second, the Article advances a novel conceptual framework for understanding the deep-seated dynamics that have eroded the New Deal settlement in recent decades. It offers a taxonomy of core mechanisms that both (a) enable private actors to continuously synthesize tradable financial assets and scale up trading activities, and (b) undermine the public's ability to manage the resulting system-wide risks. Finally, the Article shows how and why specific fintech applications-- ciyptocurrencies, distributed ledger technologies, digital crowdfunding, and robo-advising--are poised to amplify the effect of these destabilizing mechanisms, and thus potentially exacerbate the tensions and imbalances in today's financial markets and the broader economy. It is this potential that renders fintech a public policy challenge of the highest order. [ABSTRACT FROM AUTHOR]
    • Abstract:
      Copyright of Yale Journal on Regulation is the property of Yale Journal on Regulation and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
    • ISSN:
      0741-9457
    • Accession Number:
      137589906
  • Citations
    • ABNT:
      OMAROVA, S. T. New Tech v. New Deal: Fintech as a Systemic Phenomenon. Yale Journal on Regulation, [s. l.], v. 36, n. 2, p. 735–793, 2019. Disponível em: http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906. Acesso em: 9 dez. 2019.
    • AMA:
      Omarova ST. New Tech v. New Deal: Fintech as a Systemic Phenomenon. Yale Journal on Regulation. 2019;36(2):735-793. http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906. Accessed December 9, 2019.
    • APA:
      Omarova, S. T. (2019). New Tech v. New Deal: Fintech as a Systemic Phenomenon. Yale Journal on Regulation, 36(2), 735–793. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906
    • Chicago/Turabian: Author-Date:
      Omarova, Saule T. 2019. “New Tech v. New Deal: Fintech as a Systemic Phenomenon.” Yale Journal on Regulation 36 (2): 735–93. http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906.
    • Harvard:
      Omarova, S. T. (2019) ‘New Tech v. New Deal: Fintech as a Systemic Phenomenon’, Yale Journal on Regulation, 36(2), pp. 735–793. Available at: http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906 (Accessed: 9 December 2019).
    • Harvard: Australian:
      Omarova, ST 2019, ‘New Tech v. New Deal: Fintech as a Systemic Phenomenon’, Yale Journal on Regulation, vol. 36, no. 2, pp. 735–793, viewed 9 December 2019, .
    • MLA:
      Omarova, Saule T. “New Tech v. New Deal: Fintech as a Systemic Phenomenon.” Yale Journal on Regulation, vol. 36, no. 2, Summer 2019, pp. 735–793. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906.
    • Chicago/Turabian: Humanities:
      Omarova, Saule T. “New Tech v. New Deal: Fintech as a Systemic Phenomenon.” Yale Journal on Regulation 36, no. 2 (Summer 2019): 735–93. http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906.
    • Vancouver/ICMJE:
      Omarova ST. New Tech v. New Deal: Fintech as a Systemic Phenomenon. Yale Journal on Regulation [Internet]. 2019 Summer [cited 2019 Dec 9];36(2):735–93. Available from: http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=heh&AN=137589906