Summary: Nitish and I started discussing the sandbox concept last summer (before the U.K.’s proposal). I’d convened a roundtable on disruption of consumer finance and how to (and not to) regulate it. Nitish, whom I’ve known for years, came to the meeting armed with the most specific blueprint I had seen on these ideas. In the months since then, he’s refined it and shared it publically several times. The goal of a sandbox approach is to allow testing of pro-consumer innovation, while assuring that customers are still well-protected. The issue has endless subtopics. For instance, is a sandbox really needed? How do current rules impede innovation -- if they do – and which ones are most problematic? Is it appropriate to use the concept of “risk tolerance” in consumer protection? If so, can risks be defined? Can they be quantified and measured?
