Kroszner Outlines Practical Guide Managing Financial Innovation
Randy Kroszner delivered a speech on 11 December 2025 at the 20th High-level meeting outlining a three-stage practical guide for promoting innovation while preserving financial stability. He emphasizes assessing innovations through leverage, liquidity and interconnectedness channels and urges cost–benefit analysis to calibrate policy. He applies the framework to stablecoins and private credit, illustrating targeted supervisory responses.
Key Points
- 1Introduces three-stage supervisory framework to evaluate financial innovations' stability impacts
- 2Highlights leverage, liquidity, and interconnectedness as familiar risk channels across new innovations
- 3Advises policymakers to use cost–benefit analysis to calibrate targeted, proportionate policy responses
Scoring Rationale
Provides actionable, industry-wide supervisory guidance for financial innovation; limited novelty and low relevance to AI/ML practitioners.
Sources
Public references used for this report.
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