Towards New Bank Regulation - The Future of Finance
Project leader
Ivan Gržeta PhD, Assistant Professor
Faculty of Economics and Business, University of Rijeka
Project value: 19.731,48 HRK
Duration of the project: 20/04/2021 - 20/04/2022
Regulation and supervision of banks enables a stable and secure banking system in order to avoid the negative effects that bank failure can have on the entire economy. The impact of the banking regulatory framework on banks' operations is often the focus of researchers, and is therefore a widely researched topic given that its refinements and changes have significant implications for the operations of both individual banks and the economy as a whole. The latest regulatory framework introduced at the global level in the form of Basel 3 and its implementation in the legislation of EU member states, as well as the announcement of Basel 4 is always a topical issue as it significantly affects the efficiency and profitability of financial institutions.
Furthermore, the financial sector is the largest user of digital technologies and a major driver of the digital transformation of the economy. Financial Technology (FinTech) aims to compete and support the established financial industry in providing financial services. Globally, more than $ 100 billion has been invested in FinTech and Artificial Intelligence (AI) since 2010, and it continues to grow significantly.
Before proposing an adequate regulatory framework it is necessary to analyze the impact of current regulation on the efficiency and profitability of traditional commercial banks, depending on their size and the countries where they operate, and also to study the impact of digital finance on the economy, as well as to address possible risks that may occur.
For this reason, regulators face additional challenges, because in addition to regulating existing financial services, it is necessary to create a regulatory framework that will enable the progress of digital finance, while ensuring the security of the financial system as a whole and profitability for all stakeholders.
