It is clear that the fundamental approach, scope and methodologies of official supervision must evolve in line with the way financial institutions manage their activities, which increasingly is along business lines rather than legal entities. With this in mind, we as supervisors should continue our efforts to develop a more dynamic, risk-focused and process-oriented framework, reflecting the reality that banks and other financial institutions are increasingly able to alter their risk profiles at will. By “risk-focused”, I mean that supervisory resources should be directed at the most material risks to which the institution and its capital are exposed, given its array of business activities. By “process-oriented”, I mean that examiners and auditors should ascertain whether management processes and methodologies are sufficiently rigorous and effective, given the institution’s identified risks. Institutions that demonstrate a sound control structure and effective management processes should be subject to less intrusive supervision than institutions that do not have this essential infrastructure in place. As I alluded to earlier, specific supervisory arrangements, practices and techniques vary from country to country depending on differences in culture, financial system structure and internal political realities. Having said that, a set of basic principles can be identified that should guide all supervisors in an increasingly interconnected, global financial marketplace. In 1997, the Basel Committee on Banking Supervision issued a set of twenty-five Core Principles for Effective Banking Supervision intended to serve as a benchmark against which the effectiveness of particular supervisory regimes can be assessed.
Denis Beau: Navigating the digital transition, maintaining a stable payment system Opening address by Mr Denis Beau, First Deputy Governor of the Bank of France, at the France Payments Forum – Les Rencontres Digitales Conference 2021 – Crypto-payments, 8 April 2021. * * *  Introduction The health crisis that we have all been living through for a year now has affected people’s day-today habits, changing not only how we consume but also how we like to pay. This has sped up the transition towards more digital approaches. This acceleration raises major challenges for Europe’s payment ecosystem, but also for payment regulators and supervisors. Thinking now specifically from the viewpoint of the latter, the central question to be addressed is as follows: how to facilitate and support the transition whilst at the same time maintaining the foundations that underpin a safe and efficient payment system. From a safety perspective, these foundations are built on an appropriate regulatory framework and on the availability under any circumstance of central bank money, which alone has legal tender status and which anchors the stability of the whole system; efficiency, meanwhile, relies on having diverse and competing payment solutions and participants, to ensure inclusivity and competitiveness. I would like to share with you my perspective on the answers to this question.