The Matthew Effect and Modern Finance: On the Nexus Between Wealth Inequality, Financial Development and Financial Technology

Abstract

BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS.This publication is available on the BIS website (www.bis.org).

FinTech and the COVID-19 pandemic: Evidence from electronic payment systems

“…Our results, combined with the aforementioned regulatory changes, are consistent with the notion that the improvement in regulatory measures is a significant determinant in the diffusion of FinTech ( Philippon, 2016 ). These results support the notion that FinTech is a critical component of economic growth ( Frost et al, 2020 ) and may be a critical instrument in mitigating the adverse effects of the COVID-19 pandemic on the global economy. Overall, our results are aligned with the notion that the COVID-19 pandemic accelerated the adoption of FinTech platforms such as mobile and digital banking for payments.…”

“…Diaspora remittances are send for either investment purposes in a segment of the local market or for altruistic reasons. In Kenya, remittances constitutes about 3.85% of GDP and a large fraction of remittances are sent via mobile banking and other FinTech platforms28 . For example, Western Union the largest transactor in cross-currency money transfers, use M-PESA platform in Kenya29 .…”

Online Adaptive Asset Tracking Algorithm with Ordinal Information

“…Ortobelli Lozza et al [17] compared the performance of two follow-the-loser algorithms, Passive aggressive mean reversion algorithm (PAMR) and Online portfolio selection algorithm with moving average reversion (OLMAR), with the classical mean-variance method in the US stock market, and discussed their advantages and limitations. The follow-the-winner algorithm generally believes that securities that have shown good performance in the early stages are likely to continue performing well in later stages [18]. This algorithm is also known as momentum algorithm due to the ability of increment of the holding of the securities with good returns in the past and reduction of the securities with poor returns in the past [19].…”

Проблеми анонімності та централізації фінансових систем і їхнє вирішення за допомогою технології Blockchain

“…Це соціальне явище має назву «розщепленням на дві вісімки» або «ефектом Метью». Ефект Метью [1] відображає поляризацію нашого суспільства, коли багаті стають багатшими, а бідні -біднішими. Ефект Метью особливо помітний у фінансовому світі.…”