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The reason for banking regulation is so that banks do not take high-risk-high-reward-huge-losses types of risks with other people's money. If fintech does the same behavior with indirect or direct leverage of other people's money, then they should be subjected to regulation as well.



> high-risk-high-reward-huge-losses > types of risks with other people's money

Many HN readers run or work for businesses that take these kinds of risks (with money from VC funds). But those businesses (along with fintech companies) are different from banks: banks can take retail deposits.

If a bank fails then, in the absence of a government-run deposit guarantee scheme, regular people can lose their entire life savings.

If a business other than a bank fails, it's unlikely anyone other than the owner(s) will lose a large percentage of their wealth.


Then maybe the relevant distinction is "big boy investors", "fully informed of the risks", or "sharing in the rewards". Retail depositors think banks are safe places to put their money, are not equipped to parse complicated financial statements, and are not going to reap the benefits if the bank's financial wizardry pays off.

But if you have someone who is able to understand the risks, fully informed of what they are, and invests for a payback that is proportional to the risk... I don't see a problem with letting them do so. Just don't make the little guy take that risk, especially when he doesn't know he's doing so.




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