“We are history,” said Michael O’Neill, Citigroup’s Chairman, as he prepares to leave at year-end. “Today I would not want to try and create Citigroup or any of the other large banks. We are—I won’t say we are an accident of history—we are history. And unfortunately time changes and the environment changes, and so today we’ve got other challenges. We’ve got fintech, potential disruptors. We’ve got cybersecurity. We’ve got all sorts of risks that we did not have before.” The Wall Street Journal, Nov. 24-25, 2018, page B5.

Mr. O’Neill is hardly alone in his assessment of the financial services industry’s changed circumstances. Today’s lead story is not industry consolidation, which dominated the last 30 years' news. It is the juggernaut of technology-based product and service innovation, and the associated risks and rewards.

Many technologists imagine they are creating a more efficient and virtuous social order, one that institutionalizes rational behavior and rewards technology’s righteous disciples. They reflect the bias of Star Wars character C-3PO, who says of Luke Skywalker, “He’s quite clever . . . for a human being.”

Framing and managing risks of the emerging financial services economy is neither as obvious nor as binary as the Star Wars contest between good and evil. That is Chairman O’Neill’s message, and ours too.

Fintech providers cherry pick legacy providers’ profit centers. They portray themselves as brash upstarts, unbound by convention. Business and consumer customers sometimes discover too late the upstarts are also unbound by routine risk management practices.

Old alliances are upended. Freddie Mac now provides liquidity lines of credit to non-bank mortgage lenders, biting the hands of banks that have fed Freddie since its inception nearly 50 years ago.

Via this website, we will expand our coverage of issues we have previously written about under the heading, “Bauerle’s Bank Notes.” Given the proliferation of new products and distribution channels, the BBN title is obsolete. Our work, and others’ published or cited here, will highlight not just emerging stars of the new financial order, but its dark corners and blind alleys too.

We thank you for your readership and your patronage as our clients. We look forward to continuing to serve you.