4  BIS central bankers’ speeches  There are, however, challenges that need to be managed in the development of a financial market infrastructure. Some of these relate to striking a balance between interoperability and innovation. It is an accepted fact that interoperable systems are effective and convenient for their users.
On the other hand, during the early stages of innovation, it is difficult to also meet the interoperability objective. A managed process is thus necessary to move new innovations to interoperable standards. Another important factor relates to regulation vs. innovation. While regulators should avoid stifling innovation in terms of how they introduce their regulation, there is sometimes a thin line in balancing this act.