Finance

Kevin Werbach of the Wharton School said Binance, a cryptocurrency exchange facing international arbitration, has unsustainable operation practices. “For cryptocurrencies to be trusted and successful as an asset class, they can't simply be outside the rule of law. Governments have laws to protect their citizens, and it doesn't make sense for entities to try to opt out of them, even if they have distributed operations and no clear headquarters,” he said.

Kevin Werbach of the Wharton School wrote about the benefits and hazards of decentralized finance, or DeFi. “DeFi can magnify the already high volatility of cryptocurrencies,” he said.

Cait Lamberton of the Wharton School spoke about the rise, and potential pitfalls, of stock-trading apps. “You’re seeing a medium that was really primarily used for entertainment being used for something else,” she said. “There could be a mixing of entertainment and learning mindsets that could pull younger investors toward less diagnostic information.”

Benjamin Keys of the Wharton School spoke about disparities in home refinancing. “Some borrowers may sort of stay on the sidelines to wait until they’ve heard from a trustworthy source that it’s a good time to refinance,” he said.

Olivia Mitchell of the Wharton School said retired boomers should reevaluate how much money they can safely withdraw from their savings each year. “It is now widely agreed that the 4% rule is far too risky a withdrawal rate given rising longevity, exploding healthcare costs, and low market returns,” she said. “3% is the new 4%.”

Lisa Servon of the Stuart Weitzman School of Design said immigrants, formerly incarcerated people, and others can struggle to establish good credit scores under the current system. “Traditional credit scores don’t take into account a lot of the things that would show that someone is capable of paying back their debt,” Servon said.

Susan Wachter of the Wharton School said that young potential home buyers should resist the temptation to stretch their finances to take advantage of low interest rates. “Stretching to borrow can seem like the right thing to do, to take advantage of low rates, especially when young buyers think about all the years they have to both pay down the mortgage and to increase their earnings,” she said. “But buyer’s remorse can take over if and when housing prices plummet, especially if this occurs along with a recession.”

Brian Feinstein and Kevin Werbach of the Wharton School wrote about calls to regulate cryptocurrencies and claims by crypto advocates that regulatory actions will depress trading activity. Feinstein and Werbach’s research “found no evidence that regulatory announcements affect crypto trading volume,” they wrote.