Work

The impact of monetary and fiscal policy on FinTech firms during the crisis

Year: 2024

Type: article

Abstract: The U.S. government and Federal Reserve implemented rapid and substantial interventions during the global pandemic in 2020–2021. We examine the impact of the pandemic on FinTech firms and find that the effect varies based on the size and timing of the fiscal and monetary policy actions. The concurrent actions of both the Treasury and Federal Reserve were significant in stabilizing market conditions. The Fed's balance sheet expansion during the pandemic resulted in a positive impact on FinTech. FinTech subsectors such as exchanges and automatic trading, financial data, networks, processors, and business information reacted positively to the Fed's Quantitative Easing (QE) decisions. In contrast, other sub-sectors, such as asset management, internet banking, and specialty marketplace lending, were negatively impacted. These findings are crucial for regulatory bodies and policymakers, providing insights into the effects of current policies and predicting FinTech firms' responses in future crises. This analysis underscores the nuanced and sector-specific impacts of policy actions on FinTech during periods of crisis.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2024.103556

Authors: Jakhongir Kakhkharov, Robert J. Bianchi, Md Akhtaruzzaman

Institutions: Australian Catholic University, Griffith University

Language: English

Topic: FinTech, Crowdfunding, Digital Finance

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,790