Part 1: The digitalisation of financial services and their potential impact on Europe’s market infrastructure •  Technical innovations in financial services will be among the key focal points for the Eurosystem over the next few years;  •  In my article, I address four key topics where innovation in financial services will have to be tackled in the coming years:  A)  pan-European instant payments;  B)  person-to-person mobile payments;  C)  the emergence of new (non-bank) service providers;  D)  distributed ledger technology (DLT). A)  Pan-European instant payments  •  In 2015, the Euro Retail Payments Board invited the European Payments Council to develop an instant payment scheme for euro payments based on the SEPA credit transfer;  •  the implementation of this scheme is foreseen by November 2017;  •  By that time, end-user solutions for instant payments in euro should be made available at the pan-European level by the payment service providers;  •  This means that by November 2017 the European financial market infrastructure has to be ready to clear and settle instant payments on a pan-European scale;  •  As an operator of market infrastructure, the Eurosystem is exploring how to support the settlement of pan-European instant payments.
But the economic lessons of the past remain relevant. Openness comes with challenges. And as the world grows increasingly interconnected, these challenges will not only be more numerous, but they will also be more varied. Today, the Thai economy again faces challenges from the external front. The main challenge comes in the form of global financial imbalances; another challenge is the threat of high and variable oil prices. By global financial imbalances, I refer to the pattern of savings and investment allocation across the world. At the present, the US economy saves very little relative to its investment needs. Asian and oilproducing economies save more than their domestic investment opportunities. The European Union saves just enough. As a result, the US economy has been borrowing a large sum from Asia and oil producers. The magnitude of capital flows from the rest of the world to the US economy is not sustainable; it is a matter of time before the flows eventually reverse. And, in the process, the US  2  BIS Review 64/2007  dollar will depreciate against various currencies, including the Thai baht. The issue here is not only when the correction will take place, but how fast and how disruptive. Thailand, like many emerging market economies with small and shallow financial markets, is particularly vulnerable to fast-moving international capital. Such rapid movements of capital flows, if vastly out of line with the underlying economic fundamentals, can have negative impacts on the export or import sectors depending on the direction of exchange rate movement.