Work

Understanding the impact of the financial technology revolution on systemic risk: Evidence from US and EU diversified financials

Year: 2024

Type: article

Abstract: In this paper we first detect the impact of tech-driven downturns on US and EU diversified financials’ systemic risk measures (SRMs). Then, we study the relationship between these latter and the performance of BigTechs, FinTechs and cryptoassets, as proxied by the performance of specifically built market indexes. We find that equity related tech-driven downturns exacerbate systemic risk more than crypto ones. A better performance of BigTechs reduces financial systemic risk, with an increasing magnitude under tail conditions. The interconnectedness between FinTechs and traditional financial intermediaries might end up with an increase in systemic risk even under bullish circumstances. We provide useful insights in the perspective of financial institutions’ and supervisors’ integration of technology-driven risk analysis into their risk management procedures and prudential supervisory practices.

Source: Research in International Business and Finance

DOI: 10.1016/j.ribaf.2024.102290

Authors: Domenico Curcio, Simona D’Amico, Igor Gianfrancesco, Davide Vioto

Institutions: University of Naples Federico II, Università degli studi di Cassino e del Lazio Meridionale, University of Bari Aldo Moro

Language: English

Topic: FinTech, Crowdfunding, Digital Finance

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $3,370