François Villeroy de Galhau: Technological innovations in payments and beyond Opening speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Bank of France and CNPS (French Payments Committee) conference "Technological innovations in payments and beyond", Paris, 6 January 2017. * * * Ladies and gentlemen, I am very pleased to welcome you all to Paris, for this conference on technological innovations in payments and, more generally, in the financial system. Representatives from a wide range of stakeholders, from market to regulatory spheres, are here today and I have no doubt that this variety of backgrounds will make the discussions fruitful. Before leaving the floor to the speakers and panellists, I would like to share with you a few thoughts on three challenges raised by digitalisation, from the perspective of a central banker. 1. Technological innovations are opening up new opportunities for payments, which can provide benefits to the whole economy Payments are often viewed as a very technical and incidental activity, and sometimes even just as a matter of “plumbing”. And yet they are crucial for our economy and for central banks. For the Banque de France, payments are of the essence in all our three missions – what we call the “3 Ss”: monetary strategy, financial stability and economic services. First, monetary strategy: what is at stake with payments is the future of money.
Against this background of uncertainty and shocks, and in order to reap all the benefits of the fantastic process of economic and financial globalisation, we are still facing two main challenges: First, we observe persistent financial instability of which the ICT and equity bubble is a striking example. What are the factors behind such developments and which avenues should we explore in order to mitigate financial instability? Second, we had to cope with repeated financial crises in emerging market economies since the early 80s. Our challenge is how to prevent such crises and, if they occur, how to ensure that effective and predictable methods for crisis resolution are available, and enforced. In my view, the new international financial architecture (understood broadly) should provide appropriate policy responses to both types of challenges. Of course, they are interlinked in many ways. For the sake of clarity, I will address these two types of issues separately. •  First, I would like to show that some by-products of financial integration may have had adverse effects on the stability and efficiency of the financial systems;  •  I will then try to put into perspective recent crises in emerging market economies. *  1. Some by-products of financial integration may have had adverse effects on the stability of mature financial systems  1.1.