A senior official from the Chinese central bank has called for greater international cooperation in the area of fintech regulation.
Pan Gongsheng, deputy-governor of the People’s Bank of China (PBOC) and head of the State Administration of Foreign Exchange (SAFE), said that while fintech has had a transformative impact upon finance, it has also produced negative effects including an exacerbation of cross-border risk and a heightened tendency towards monopolisation.
“Network effects mean that fintech competition often leads to ‘winner-takes-all”’outcomes including market monopolies and unfair competition,” wrote Pan in an opinion piece published by The Financial Times.
“Globally, we are already seeing some Big Tech companies using profits from their other businesses to directly subsidise or cross-subsidise to unfairly grab fintech market share.”
In order to mitigate these risks, Pan issued a call for greater cooperation internationally on regulation that “emphasises the substance not the form of a company,” and “align[s] business rules and standards with regulation to fend of arbitrage.”
“China’s financial authorities want to step up exchange with our international counterparts and strengthen co-operation on antitrust issues, data treatment and consumer protection,” wrote Pan.
“We will ensure that fintech regulation effective, measured and guards against cross-border regulatory arbitrage and contagion…we need to try hard and work together.”