It would therefore be a good idea to eliminate these distortions, for instance, along the lines of the proposal already put forward in 2006 by the German Council of Economic Experts.2 The previous flexibility-increasing measures taken both by policymakers and the social bargainers have made enterprises, in particular, more resilient to temporary slumps in demand, such as during the economic crisis – when it makes sense to retain experienced workers and their expertise.
On top of this, FinTech renders some of the long-standing regulatory practices ineffective. This means that regulators need to become more flexible. If they do not, they risk not fitting through the doors opened up by new technologies. To put it bluntly, without adapting to rapidly changing financial developments, regulators may find themselves sidelined and unable to meet expectations.