In that context of extended need for cooperation and coordination among regulators and supervisors, my last comment is related to the levers at hand to promote trust and reliance on foreign supervisors to prevent the development of a trend towards ring fencing and the risk of market fragmentation. Let me say first that I don’t think that promoting mutual trust and reliance among supervisors can move us to a world free of ring fencing. This is because it has its root and it is the result of the trade-off each regulator and supervisor has to face, in normal time and during crisis, between the need to preserve the stability of financial intermediaries or the financial system as a whole for which it is accountable and the need to preserve their competitiveness through their integration to the global financial system. For instance, for banks with cross-border activities, regulators and supervisors need to balance requirements for pre-positioning of capital and liquidity in their jurisdiction and the need to leave to those banks enough flexibility in the management of those resources at group level. And this without mentioning the development of idiosyncratic financial stability risk which might call for macroprudential approach and specific additional capital requirements at a country level, and might add to the complexity to maintain this delicate balance.
To be more concrete, let us take the example of Open Banking. The regulatory framework set out by the second Payment Services Directive (PSD2) has lifted the technical and legal barriers to accessing payment account data. The immediate consequence has been the development of a new ecosystem offering consumers a wealth of new services. However, we have also imposed high data protection requirements at the European level, in particular in the rules governing access to this information. Second principle: in order not to be mere spectators of change or react to it too late, we must fully take on the prospective observation, experimentation, and operational commitment. In the area of payments, the recent BigTech initiatives with a global impact have once again brought the current inefficiency of cross border payment solutions to the forefront. However, the issues of financial stability, monetary policy and sovereignty raised by these projects should encourage us to operationalise our efforts to promote more efficient payment systems where appropriate by considering an operational involvement of central banks, based on the consistent and coordinated use of new technologies. As regards infrastructures, we have taken an interest in blockchain technology since its early stages. We were the first central bank to develop, regarding the specific use of SEPA creditor credentials, a decentralised register system based on a blockchain protocol, the “MADRE” register. Of course, this is only a first step, which does not exhaust an extremely vast and diversified field of experimentation.