1. AP/ECON 3430 3.0 Monetary Economics I Fall 2016
Topic 10A&B: Fintech
Professor Brenda Spotton Visano

2. Traditional Financial System
Functions: transfer purchasing power in and across time; manage risk
Structure: financial instruments (products) and services; markets; institutions (intermediaries); publicly or privately owned and operated
Regulation: objectives (protect consumers, protect stability; promote competition; promote efficiency) via industry and government oversight and requirements on entry, disclosure, minimum capital, price restrictions, etc.

3. ACTIVITIES CENTRES OF ACTIVITY CANADIAN FINANCIAL SYSTEM
CENTRES OF ACTIVITY
Exchange of Goods or Services for Current Income or Current Consumption
Medium of Exchange
Cash
Chequing Account Balances
ACTORS
Households
Businesses
Governments
Financial Markets
Capital: Equities; Bond
Money
Mutual Funds
Foreign Exchange
Derivatives
Exchange of Current Income for Future Consumption
Savings & Investment
Stocks
Bonds
Guaranteed Investment Certificates 
CANADIAN
FINANCIAL SYSTEM
Financial Institutions (FIs)
Banks: Retail, Investment
Credit Unions
Trust Companies
Insurance Companies
Pension Funds
Central Bank
Risk
Hedging, Speculation
Options
Futures
Swaps
Collateralized Debt Obligations
QUESTIONS
What are the economic functions of financial instruments and institutions?
How should they operate?
Why and how should they be regulated?  
Regulation & Oversight
Bank of Canada
Canadian Deposit Insurance Corp
Office of Superintendent of FIs
Fin Consumer Agency of Canada
Provincial Regulators (e.g. FSCO)
Financial Industry Associations

4. Some Fintech Entry Points
Payments and infrastructure: Electronic transactions; Crypto-currencies; back office infrastructure
Savings and investment: P2P lending and crowd funding
Operation and risk management: back office operations
Data security and analysis: “Big Data” information
Customer interface: Dashboards

5. How will fintech affect the financial system?
Competition: availability of services/products? Cost of financial products and services? Accessibility of basic banking?
Consumer protection: Privacy? Quality of information?
Resource allocation: allocation of resources in savings and investment?
System stability: portfolio risk assessments?

6. Silicon Valley meets Wall Street
Fintech: Silicon Valley Takes On Wall Street (Apr 21, 2015) 0-0:26 and 0:59-1:30 minutes
Moderator: Nick Shalek, Partner, Ribbit Capital Panelists: Baiju Prafulkumar Bhatt, Co-Founder, Robinhood Libor Michalek, CTO Affirm Jillian Manus, General Partner, Structure Capital Jake Fuentes, CEO, Level Money, acquired by Capital One