I will discuss how it might impact banks, how it might impact markets, and how it might impact supervision. I will then turn to the structural changes triggered by new technologies and discuss what they might entail for banks and supervisors. Banks, markets and supervisors in the post-Brexit world Anyone who tries to predict the future has to deal with uncertainty.
Prediction is something we humans are just not very good at. Research shows that we tend to overestimate the likelihood of positive events. Likewise, we underestimate the probability that something bad will happen to us.1 And this applies to predictions about the future of banks as well. So, banking supervision can be seen as an exercise in tempering this “optimism bias”.