Banking, Technology, and Instability

2026

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AI-generated summary

1) This paper examines the growing instability in the banking sector driven by the rise of "Banking-as-a-Service" (BaaS) models and proposes policy reforms to address these risks.
2) * Explores the shift from traditional bank outsourcing to BaaS, where fintech platforms outsource core banking functions.
* Analyzes the resulting business model and customer expectations instability, and their potential to trigger bank runs and panics.
* Identifies and evaluates policy reforms, including recordkeeping enhancements, liability rules, and regulatory perimeter adjustments.
3) Banking, Fintech, Regulation, Financial Stability, BaaS

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