Members of Congress and financial regulators from the Federal Reserve, U.S. Treasury, SEC, CFTC, and CFPB appear set on regulating the crypto trading system (traded coins and associated marketplaces, exchanges, brokerages, lending, staking, derivatives, intermediaries, and enablers) as part of the traditional financial services system. Policy discourse on this topic…

Acorns Grow Inc., the financial technology and investing startup, said last week that it was abandoning its $2.2 billion merger with SPAC Pioneer Merger Corp., putting itself on the hook for a $17.5 million termination fee. Coming almost eight months after the deal was first announced, the news surprised many…

This article first appeared in The American Banker on April 28, 2020. The coronavirus pandemic has exposed the weaknesses of federal crisis response capabilities across the entire U.S. economy. Nowhere has this weakness been more evident than in the government’s efforts to rescue the small businesses that account for almost…

This essay appeared in the Harvard Business Review on August 21, 2020. A slightly different version appeared in the American Banker on September 2, 2020. America’s current financial system is essentially broken for the many working Americans who live on the edge financially. Mismatched incentives are at the heart of…

The Fall of Wirecard By Todd H. Baker This Article First Appeared in the Columbia Blue Sky Blog on July 8, 2020 In the public imagination, Wirecard was Germany’s biggest tech company success story — a €24 billion high-growth payment processor doing deals across the globe and pioneering new technologies. While naysayers complained about…

Todd Baker* & Kathryn Judge** Small businesses are among the hardest hit by the COVID-19 crisis. Many are shuttered, and far more face cash flow constraints, raising questions about just how many will survive this recession. The government has responded with a critical forgivable loan program, but for many of…

The Federal Reserve’s recent decision to revive the Term Asset-Backed Securities Loan Facility was a good and necessary one. It will bring needed funding stability to many lenders and allow them to continue to support their borrowers as the COVID-19 crisis develops and resolves. …

Small businesses are a key driver of the U.S. economy. They support the growth and vitality of our neighborhoods, spark innovation, and provide a proven pathway for many people — particularly women and minorities — to achieve financial success and independence. And they are in trouble — big, big, trouble…

One of the great unknowns about online lending is how individual lenders will perform in the downslope of a credit cycle. We’ll soon know the answer. The online lending story will play out in a three parts, beginning with credit fundamentals and funding availability and ending with servicing and collections…