One example is the work involved with preparation for the Millennium date change, in which the Bank was heavily involved in ensuring that the UK financial system was ready; this work certainly brought home to me the reliance on IT and the huge variety of interconnections between different systems. While IT networks and improvements in communications have allowed provision of financial services more cheaply and efficiently, they have also brought financial markets around the world closer together. This trend to globalisation has been beneficial to the UK. Net investment income and profits from overseas make an increasingly large contribution to the UK balance of payments, going some way to offset the deficit on traded goods. However, with global markets, shocks in one part of the world are transmitted more quickly to other financial systems. The most recent example was the Asian crisis, starting in the summer of 1997 in Thailand; and spreading to Korea which had to seek outside support in December of that year. As turmoil spread through financial markets in the region, within a year equity markets had halved in value with a similar depreciation in exchange rates. Conditions were further exacerbated in August 1998 by the default on Russian government debt, fuelling further fears about emerging market debt. The flight to quality this prompted contributed in turn to the collapse of one of the large US hedge funds, Long-Term Capital Management. The events of 1997 and 1998 brought home the complex linkages between financial markets in a global economy.
To give another example, under the transposition of the second European Payment Services Directive (PSD2) in 2018, third-party payment service providers – which do not hold client funds – are subject to reduced annual reporting requirements. However, this proportionality does not mean being less demanding, especially with regard to the fight against money laundering. The general principle of “same activity, same rule” must apply. Indeed, it is in the Fintechs’ own interest that we should help them to apply the regulatory framework. We also want to help them when new rules are put in place. Under the PSD2 framework, the ACPR was the first European authority to grant authorisations for payment initiation and aggregation services. In total, it has authorised more than 20 actors to offer these new services since 2018. It has also worked to promote the development of open banking, by making sure that all actors can work together on the deployment of APIs. The eight workshops this afternoon, led by experts from nearly all of the ACPR’s directorates, are testament to the focus we place on teaching and informing. But if we can do even better, even more, tell us today. I shall finish by focusing on the ACPR-AMF Fintech Forum which is what brings us here today. Created in 2016, it is a forum for exchange which we try to make as efficient as possible by setting up, where needed, targeted working groups to make concrete progress on key topics.