3. A Chinese giant Fintech firm used to make loans to consumers via its internet platform, and refinance the consumer loans using instruments such as asset-backed securities (ABS). (a) Describe the risk involved in such a business and why the regulator would want to intervene in the firm's business. (b) Later on the Fintech firm was prohibited to issue ABS against consumer loans. The firm transformed its business mode by making joint loans with commercial banks, and charging commercial banks for the service. Now these consumer loans appear on the commercial banks' balance sheets. Discuss why would the regulator still want to intervene in such a business mode. (c) The Fintech firm has been lobbying that it is a tech firm which aids the financial business, not a financial firm. Discuss the motivation of the Fintech firm for doing so and why the regulator would disagree. (d) One argument is that with the fast development of finance technology, there will be a dramatic transformation in the financial business mode. In particular, traditional financial firms such as banks will specialize in providing funds; whereas modern tech firms will specialize in providing advertising, customer rating and credit rationing service. Discuss the agency problem involved in the above new business mode and the challenges to regulators