In its 70-page Consumers and Mobile Financial Services report, the Federal Reserve made no mention of regulation in the mobile-payments sector, or any potential threats techno non-banks could pose the public. No one on Capitol Hill seems to have noticed all the big tech companies acting like unregulated banks.
That’s because power and political influence are linked to corporate omnipresence. When a few companies quickly become politically forceful, they often use their power to reduce oversight and accountability. They build systemic risk.
We’ve seen large, politically influential firms implode and damage countless lives before. From Enron and the energy sector and WorldCom and the telecom sector in the early 2000s, to the recent banking-sector hit on the global economy, past performance is an ominous glimpse into future behavior.
It is better to be wary of issues before a crisis than suffer in the aftermath.
If the government is too enamored of its new friends to care about the pitfalls their dominance could bring, we must take up the vigilance mantle for ourselves.