Document Type

Article

Publication Date

2022

Source Publication

Journal of International Banking Law and Regulation, 37.2, 2022.

Abstract

Against an overview analyzing the mobile money system, this article provides a preliminary criterion for determining potential systemic risk of collapse of a mobile money firm (MM firm). The article has two main components: first, defining systemic risk, it clarifies that systemic risk is likely to arise through a delay in returning customers’ funds from an MM firm in insolvency proceedings. Second, the article points out that determining whether this delay will have systemic consequences ought to consider diverse elements, particularly, the range of components of the economy which could be impacted by the failure of an MM firm, the size of the failing MM firm, available substitutes for mobile money, and interconnections with the remainder of the economy. Future research should explore this topic in greater depth and begin developing regulatory tools that can address potential systemic consequences of failure, such as accelerated bankruptcy regimes.

Comments

Accepted manuscript version

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