“It is hardly possible to overrate the value…of placing human beings in contact with persons dissimilar to themselves, and with modes of thought and action unlike those with which they are familiar…such communication has always been…one of the primary sources of progress.” –John Stuart Mill
In a speech delivered by Victoria Cleland, Chief Cashier of the Bank of England, the august institution once again outlined its commitment to understanding and enabling financial innovation or Fintech. Cleland included in her remarks a quote from John Stuart Mill delivered around 170 years ago emphasizing the importance of institutions challenging established norms with potential changes that may be to the benefit of all. Cleland pointed directly to the changes that technology is making to finance, in particular, digital currencies and blockchain, crowdfunding and peer-to-peer lending. Cleland affirmed their stance on Fintech working with disruptive finance firms;
“The Bank of England has long been committed to, and benefitted from, collaboration.”
Cleland stated that finance is a sector that is “perhaps more susceptible than most to transformation, given its products are already almost entirely digital.”
“We need to understand what FinTech means for the entities we regulate, how it might impact the overall safety and soundness of the financial system, and how it could alter the transmission mechanism for monetary policy. And of course for our own operations, through which we implement those policies.” said Cleland.
Cleland buttressed much of what was previously stated by her superior, Bank of England Governor Mark Carney. In a speech several months back, Carney explained the potential of Fintech;
“With time, FinTech could mean a more open, more transparent, and more democratic global financial system.”
While actions will always speak louder than words, it is encouraging to see a 322-year-old government institution so willing to seek out change. The UK has persistently led the globe in Fintech innovation. This leadership has been propelled, in part, by policymakers and other officials willing to break away from the routine of tradition and create a regulatory path for innovation to occur.
The speech is embedded below.
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