The financial system has largely recovered after the turmoil of 2018 and the global financial crisis. Few real changes have been made, though. Although reform has been promised on both sides of the Atlantic, the system has remained largely the same. A decade after the crisis, the world is still vulnerable to largely the same threats.
Big banks were supposed to change their ways of doing business and undergo internal reforms to prevent future problems. Some of those who are blamed for the crisis may have taken a step back, but the number of banks that continues to dominate the landscape is scarcely more than twelve. That’s not the whole story, though, since the dominance of the too-big- to-fail financial institutions may nevertheless be coming to an end. And what seems likely to end it is not internal reform but rather the emergence of the transformative technology known as blockchain.
Big Banks Continue to Pose a Big Threat
In the aftermath of the financial crisis, people were hoping that those responsible would be held accountable. When this didn’t happen, many remained optimistic that at least the threat posed by the too-big-to-fail banks would be resolved. According to Kashkari, who worked for both Goldman Sachs and PIMCO, the danger is still there and things could take a turn for the worse when least expected.
An important milestone was set in 2010 when the Dodd-Frank financial reforms were implemented. The critics were not satisfied with the progress made and things took a turn for the worse in recent years. Some of the legislation is being rolled back and under the new administration, it doesn’t benefit from the same levels of support. Under these circumstances, President of the Federal Reserve Bank of Minneapolis Neel Kashkari, who formerly worked at the U.S. Treasury Department, urges lawmakers to take seriously the need for comprehensive reforms, while educating the public about the risks of a new financial crisis.
Different Paths Leading to the Same Goal
Speaking from a position of considerable authority, Mr. Kashkari has highlighted the threats in an eloquent and cogent manner. His warnings are also timely, coinciding as they do with the emergence of the new technology that we know as blockchain. This technology is a game changer not least because it makes it possible for financial transactions to be organized in a more decentralized way. Some variants of this technology have already been made available, while others are in the process of being developed and refined. And make no mistake about it; blockchain has a very real potential to lower transaction costs throughout much of the financial sector.
At the very time when a new financial crisis may well be looming, the emergence of blockchain provides us with some very welcome good news. The considerable upside of this new technology is that it enables us to realistically envisage a new era of decentralized financial transactions that are also more transparent and cost-effective. These financial innovations are still taking shape, of course, and they may yet evolve in unforeseeable ways. They may also be met with considerable opposition, but history has taught us that technological progress is inevitable and unstoppable. Ultimately, by greatly reducing the need for employing an intermediary when performing financial transactions, blockchain may spell the end of the big banks.
This is a very nice article, like we’ve all known over the pass few year that blockchain is the next process where by transactions will be made by 50% of the world population. Posing a Serious Threat to Big Banks is a war that the Banks can never wins
This is very important to hear about 2018 and people should know that new techs are affecting big banks
Pretty interesting take. I didn’t know much about cryptocurrency before this.
This is very informative and well described. It’s easy to understand all the points being made about blockchain tech. I enjoyed it a lot and will share what I learned with all my friends.
Blockchain technology is just going to rise for sure. Not sure how that will tie into the crypto coins that are currently available or those to come. I think cryptocurrency will definitely disrupt the financial world as we know it. I do however hope that crypto mining bans don’t happen.
Step aside banks… bitcoin tech is here to stay.
I do agree most of the banks are afraid from bitcoins these days and its happening.
wow nice post, i like it
This very informative. Hope everyday can read this for them to be aware that blockchain technology is now rising and most probably will tie up to a cryptocurrency.
very nice artical…
very nice artical..
Great and useful article
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I am really happy to say it is an interesting post I ever read . It is very helpful.I learn new information from your article , you are doing a great job. Your post is helpful to avoid the mistakes. Thank you so much for sharing us this awesome post . Keep it up.
Really nice article. The traditional Bank r in danger . I think people will like to use crypto currency process rather than the banks. Its easy and hassle free. Thanks for sharing your valuable thoughts with us.
Thanks for sharing the nice article about Block chain Tech Poses a Serious Threat to Big Banks.. It’s easy to understand all the points being made about blockchain tech.
Interesting perspective on how blockchain tech affects big banks~ article is nicely written
interesting and great post. Very informative.
very interesting and informative post. Thanks for sharing this.
great article. Thanks for sharing the info
Very informative argument.Makes one turn a keen eye on the developments to see this come to pass.
Very informative argument. Makes one turn a keen eye on the developments to see this come to pass.
Nice blog that shares the fact that big banks are in serious threats by new tech coming in 2018. I hope people are aware and take caution down the road.
This is exactly why those in Walstreet are holding the fork down in the crypto market
This is exactly why walstreet is holding the fork down on crypto
This is a quite different take from what most people think… but its good to see antother perspective! Well done!
Wow this is an interesting take!
New perspective and solid information. Thank you
Very interesting article on finance.
I think the biggest problem behind Crypto and blockchain is the fact that there is nothing backing currency. Once someone brings out a coin backed by an asset then I think you will see broader acceptance.
Very interesting view! the introduction to blockchain is something that can either help or further push the gap
Interesting article! Really its a big threat!