A cross-country analysis of 42 economies from 2012–2022 finds that algorithmic lending significantly expands financial inclusion but concentrates gains among FinTechs rather than incumbent banks. The study documents that tighter domestic regulations prompt lenders to shift operations via shell subsidiaries, engaging in regulatory arbitrage. Additionally, unregulated AI credit expansion is shown to amplify macro-prudential risks by accelerating credit cycle volatility along heavy-tailed distributions.
157 other tracked developments touching the same claims.