Giulio Cornelli, Sebastian Doerr, Leonardo Gambacorta, Ouarda Merrouche, 02 February 2021

The rapid growth of innovative companies that use new technology has the potential to transform the financial sector fundamentally. This column shows that regulatory sandboxes – a prominent and widely adopted regulatory tool to spur innovation in the financial sector while staying alert to new risks – help these fintechs raise capital. They do so by reducing informational frictions and regulatory uncertainty.

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