Potential impact of financial innovation on monetary policy

Analüüs 15-05-2017

The recent wave of financial innovation poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.