Central Bank of the Future Conference Panel 2: Innovations & Central Banking (Day 2)

We're going to try to nourish both your
mind on your body over this lunch so

we are going to have a panel during lunch
please feel free to continue to eat I just

ask you save some dessert for the rest of
us here in the diocese if you don't mind.

So my name is Chris and I'm from the film
one of the Gates Foundation and so

pleased to welcome you to this luncheon to
talk about central banks and innovation

and I'm very happy that we have 2 experts
on the subject here to join me today for

this is a question on the diocese allow
me to introduce 1st deputy governor.

For the financial stability section at
the Central Bank of Nigeria sitting to my

immediate left the deputy governor is
a member of the Monetary Policy Committee

as well as a committee of governors
at the central bank there and

her primary responsibility is for
financial policy as well as the regulation

of the banking and the payment systems
She chairs the National payments which

as well as the financial inclusion
technical technical committee and

if you were here yesterday for Mary
Ellen Iskenderian keynote speech you saw

the governor in a video in a prior
life in the private sector when she

was an executive director at Diamond Bank
one of Nigeria's largest banks and

one of the banks that worked with world
women's world banking on the beta savings

Project Savings products and the deputy
governor has over 20 years of private

sector experience in financial services so
welcome to go over to Ann Arbor.

Sitting to my left to your
right is Leonardo Korto

who is the head of innovation and
the Digital Economy unit at the Bank for

International Settlements in
Basel Switzerland if you're not familiar

with the b I o s The b.r.s. is a bit like
a central bank for central banks in a way.

He is an economist by training and
Leonardo serves as the head of

monetary policy served as head of
monetary policy at the b i e s..

As well as the head of money and
credit union credit unit and

the head of the banking sector unit in the
research section at the Bank of Italy in

Rome and his primary research interests
include monetary transmission mechanisms

effectiveness of macro prudential
policies on systemic risk and

the effects of technological innovation on
financial to mediation which is Maynard

focused currently in his in
his new role at the B.A.'s and

I'm Chris Columbia from the ability of
the Gates Foundation as I mentioned and

at the Gates Foundation we believe
that every person deserves the chance

to lead a healthy and productive life and
so you're probably very familiar

with the Gates Foundation's work in health
medicines vaccinations and education and

so on but we also focus on financial
inclusion because a good body of research

suggests that when people who are unbanked
or poor marginalized groups and

women when they have access to accounts
and especially digital financial services

accounts they are better able to lift
themselves out of poverty by improving

their ability to see to borrow and
to make payments and

to invest in their futures and so
that's why we care about things

occlusion they're very happy to partner
with the universe to Michigan on this

important project I'm also recovering
regulator and central bank or

myself I have to say I worked for
25 years for

the Federal Reserve Bank of New York
in the supervision section there and

also spent 2 years at the b. us as well
working for the standard setting body for

bank supervisors called the Basel
Committee on banking supervision and

so I should stress that any comments or
opinions that I'm a shared today

are my own and
do not in a survey reflect those of

the Gates Foundation or
frankly anyone else who matters.

So I'd really like to thank Michael Barr
Harris Christy Baer Kelly Brown Tracy

around duzen Ashton.

Ashton Smith as well as
the large number of Ari's and

staff here at the university Sam Jesse
Sean j. Jennifer Lucas Cole and Nick for

putting us a wonderful conference I hope
you might join me in a round of applause

for them to thank them for all their
hard work thank you thank you thank you.

So we're going to talk today about
innovation and particularly the role that

central banks have in responding to
their innovation in the marketplace and

Leonardo at the B.A.'s you and your
colleagues are have been monitoring and

reporting on the emergence of
some disruptive technologies

in the marketplace and some new service
providers in the financial services spaces

as one of you tell us a little
bit about how these new players

have expanded into the provision of
financial services financial services and

I know that you have some slides you
like to share with us on this question

you're so here 1st of all thank you Chris
thanks to all due we're going as a for

a very me to the panel is a great
blip pleasure going on or.

Your prepared some slides into
the news the topic of big tech or

in finance and the slides.

But based on some of the searches that
we have conducted the be a yes and

they are summarized that
in a chapter of our.

Economic Report obviously
the usual disclaimer applies saw.

We know that technology firms are we have
in mind Barbara Ahmed's on Google Facebook

that and the one that are on the left
side of our on these of these slides are.

Growing rapidly in the last decade and

they have started to do some
inroads into into finance so.

These are these firms are a very big this
is the name big tech and indeed the level

of a market capitalization that these
are year then those of the g. seeds.

The one that do the biggest
financially situation in the world.

So why technology firms are venturing
into finance and they basically they ever

will call d.n.a. So is it that our
network exceptionally nice and the d.v.d.

set that is a sort of a feedback loop or
that allow them to have a lot

of synergies you can think
about it be meant for

having a lot of data creating network
except now if he's developing in

the platform Newark D.V.D.'s and these
activities that would bring you data so

it's sort of enforcing the law
indeed the the 1st fact that

they want to mention to you is that big
ticket ever a portion of their revenue.

From financial services but
at the moment that these are.

The you can see in on the left
side of these a slide.

Is more.

It is something like an 1111
percent of the total revenues

while there are good businesses steel or
even information technology and

consulting the cloud computing that only

there to represent around 46 percent
of the of thought the revenues

we know that Big Tex the server
globally but when we look at.

The big tech subsidies that these on the
right side of the slide that we can see

that the British are not a mini look at
the new North America and the Pacific but.

They have moved to quite
extensively in in China as a win or

with Dan cent and financial.

But still they're developing
Goatse responding and

obviously in emerging market
economies are a nod to.

The Southeast Asia East Africa and
Latin America.

So the 2nd fact is that.

The development of of a big
financial service is.

Full of a very precise barter saw for
example Pieman services

where the 1st financial services that
big of and the example of where we mind.

Only.

Be the group.

And people for 40 b. and the.

Financial services that are fully
integrated into the e-commerce platform

the development of.

Services.

Is value in a discount
we said that less and

I should develop a credit
card payment them and

indeed they benefit from the fact that
they know in a lot of counties that

I fed action of the population that use
mobile phone so the school did explain for

example why China an outstanding level of.

Big **** De Mint over g.d.p. to 16 percent

with respect to very law level in United
States in the ability in the nation and

United Kingdom for
the communication of these 2 factors.

So as a sort of.

Prosecution of this story so after theme
and so we speak to accept or to offer.

A particular issue and
also other products and

these are fairly well
management products and

such as a money market funds so
in the slides I just represent.

One the composition of
one a very important

money market fund because it's
the biggest in the world you borrow from.

That is offered by the big group book and

I want to shore some
interesting facts on the.

Left hand side you can see that the
composition of the asset that you borrow

to Mimi in bank deposits or
60 percent of the assets that you are in

bank deposit and
in terms of the maturity of us.

On the right inside you can see that.

Around out of there are certain
limited your less the dirty days so

does he mean these 1st of all or is that
the relationship between the big tech and

banks that is quite That is quite complex
or and then these all sort of flex or

saw potential financial stability
concern because imagine everyone on

the money market fund that is
composed of the positive short term

these are obviously we likely in some of
the if you will the source of our bank fun

so the last fact that we want to shoot
the to show you is that the credit.

Easy is also offered by.

These large technology
the technology firm so.

It eases these more with
respect to do to other forms

of financing if you think
about the new feet the credit.

In a 2017 These are represented 0.5
percent of the total all standing

in the war and even in China China
is the vanguard of the for

the offering of these
a product is only 3 percent.

Some studies conducted that it
showed that nobody could relation

between a level of financial
development of a county and a level of

credit you can see these are from the left
hand side part of these good are for

where you have on there we don't align
the fraction of a number of the number of

branches of the population and
on the galaxy's you have a duration

little bit of that issue between
beat the credit into the credit but

also that is one of final
consideration want to do that.

Yes a big There clearly is more lower but
is very different is very different from

bank loans and
then you can see these from these.

Right inside the where we do some
colleagues in China in one going and

through using and financial data we
have to understand the decorrelation

of credit with respect to us at price and
we have seen that the way.

Traditional bank launce are.

Correlated with just a price in the as
you said the base you saw in the mother

what we have been differential
accelerator mechanism big ticket

is not that is not correlated is market
related with the business cycle so

this change completely the money that
there is a mission mechanism and the way

central bank should factored in
the development of the credit.

In these final days just to report some.

Additional studies that have
been conducted and b.s.

if you want to talk to develop
further some of these points so

there are there's a fascinating overview
and I commend the paper to the audience is

reading later it is a great paper looking
at big tech in these very large firms

getting into financial services
can you tell us a little bit about

maybe some of the benefits that they might
bring as well as some of the drawbacks you

mentioned the monetary policy challenge
being maybe one of the drawbacks but

are there additional things that we should
think about as regulators and supervisors.

It's a very it's very
interesting question that

I was there to develop just making
one example that is the one of.

The market for credit So 1st of all are.

The benefit and the cost of that can
finance that I brought from the uni so

these are net pork activity feedback
loop creates a lot of potential and

benefit in terms of financial inclusion
but also a lot of risk so let me start

the we the potential in I mean there's
a good example of the credit market so.

In terms of the provision of credit.

There are benefits coming from
this screening activity and

a large amount of the provision of
credit are to financially excluded

saw that is already
leisure to showing that.

The use of.

Machine learning and big data for
credit scoring allows the big tech or

to serve the creditor to a lot
of segment of the population

that are financially screwed and
this is clear with the experience of and

econometric analysis that
we have conducted for

China and and and and
Argentina with medically but.

Other potential benefit.

From the fact that there is no need for
collateral so what we see is that

in a way that are substitutes
collateral and this is also.

Producing a positive effect in
terms of financial inclusion but

as I mentioned there are.

Some potential costs that
that did I have a from

from the data from the use of the data and
these are basically 2 1st the easy.

Potential.

Effects are derived from
the market power and

the 2nd one is about to the misuse of
the us or market power it is clear so

big they can became dominant and
basically they can call so

we did a position but isn't that what
is to entry or they can simply exclude

the other firms from
the provision of their services

in their platform that they can just
simply offer their own their own products.

And images of did that there
are there are all sorts some

studies that show that it could be that.

As big tech a very very smart in
presence communication in the event

extraction these could be not been
a future for the consumer and that is

in terms of how to relocate the consumer
surplus and also a potential.

Negative effect could be
derived from the fact that

if they are good in that
they use a particularly.

Smart the and the in the directing the
risk some part of the population that that

are risky that this should be for example
ensure that they could be excluded or

thoughts of some form of discrimination
terms of minority think about and

that is a people to show that the black
and Hispanic King in the u.s. could be.

So it would have less
potential benefit but

they will do so again in terms of public
bodies See I think of that the code you.

Bring a.

Lot of potential benefit them but
these arrests have to be.

It wouldn't I'm solvable sort of because.

It's a public choice and it's a choice all
books aside these societies could have

different preferences sorts of
event depending on the leaf and

the level of financial development Yes
Well having read your paper and heard your

remarks to date if you'll see me like this
is maybe just the beginning of the chapter

of big checks and finance that as you said
their credit expenses are rather low but

that said Facebook has
2700000000 customers

G.-Mail has 1500000000 users I mean these
are larger than most countries and so

they haven't a tremendous base to expand
to if they choose to do that and so

we'll need to think carefully about those
subjects so thank you very much for that

overview Leonardo Debbie governor Mudd
could you share some of the perspectives

perhaps as a central banker and
supervise your working in a dynamic and

vibrant market like Nigeria which is
a very young population very quickly.

What types of person services providers
are you seeing that are disruptive and

how do you think about those as a central
banker and supervisor Ok thank you k o

hear Me Ok so I think we're seen
disruption across the value

chain of financial services in one year
I know that when people talk about

tech data innovation
digital innovation People

tend to look at that as disrupting what
the traditional banks are doing but

interestingly 9 Jiri and I'll use 90 a lot
because that distinction I come from

we find that we see this happening even
within traditional banking services where

banks are deploying a I based solution for

convenience of customers they're
using it for their credit scoring

they're using childbirths increase
in the it's sort of in terms

of driving product development product
design within the banking sector and

then some of these technologies as
well the fin techs are partnering

with the banks and are providing
these as value added services for

the banking system because I think it's
really important to see to it that there

is well to say that this is rotten is not
just expanding the number of players is

also changing what we see within
the banking sector we think that

as regulators we are always looking at
how we can bring the cost of financial

services down to reduce the cost and
we see technology innovation

new channels of delivery we do see in cash
on the cost of cash as a huge opportunity

that we can leverage Having said that
we're seeing disruption in savings for

example new savings apps
that is helping to bring.

Beyond typical savings government savings

people I want to invest
in government treasury.

Yes can now do it Vadra mobile phone in
the past this used to be reserved for

the high net worth individuals that have
access to large private banks we're seeing

happily disruption in the micro
lending area where you have some

companies providing micro loans to
often people that ordinarily would not

qualify for a loan within a sort
of typical bank but I think one of

the huge the biggest disruptions to
seen is in the payment system itself.

And maybe merchants to collect
you know payment for goods and

services you talked about
Nigeria about 200000000 people.

Use So 60 percent of that is people under
the age of $35.00 a lot of creativity

in there a lot of the informal
side is pretty basic but

it's also increasingly bringing up these
new entropy nurses that Ali program

your typical open a store it's like
I have an idea I go on to Instagram I

sell I collect somebody needs to
give me a solution for that and

Instagram is out across borders you know
it's Nigeria it's Egypt it's the u.k.

I have to deliver I have to collect
payment you come to talk about

the arrangements around regional
payments and international payments so

we see from tax entry into much and
acquiring space a lot we see them

providing solutions that I've spoken
to and of course the opportunity so

in terms of how we see it as
regulators are said one part of it

we like it because if he brings down the
cost of providing services all well and

good the data helps us to make
better decisions even for

the banks you know when we talked
about financial health Citi and

if you want central banks
to to to measure we're

going to need that data of course the
opportunities where financial inclusion

sort of concerned the results speak for
themselves today in Nigeria 63 percent.

Is our financial inclusion number and
a lot of that has happened in the last 7

years we've seen astronomical
as trauma nomic or increases in.

Isn't payments pos use reduction
in check use you know transactions

digital government digitize in their
collection and then we see all of that So

those are the good benefits and
of course it's also a huge opportunity for

a regulator to expand their sort of
coverage in terms of the types of

organizations you supervise sometimes you
also talk about that as a problem with

actually an opportunity to be able to see
more come out of the shadow banking space

where you had no visibility to see these
new companies emerge the risks apart

from the cyber is risk that I think is par
for course when it comes to technology so

let's pack that for
a regulator you are thinking about

the fragmentation of the number
of you know organization.

They have some of them are banks some of
them are not banks on the magic companies

they were there any a conversation about
what regulators should be doing to

collaborate to the telco regulator because
lab rating for instance with the banking

regulator so there's that fragmentation
you have to consider borders

you know if you're serving
Nigerian customers or

you know registered in
Manchuria How do I sort of and

sure that consumers are protected
their data is protected so

new questions about cross
border collaboration so

in that respect proper finale t.
over a glacial under regulation if

you talk to a typical bank they would tell
you that the fin techs are not regulated

properly they feel over regulated and they
think you're giving these guys a free pass

should you use the same risk based
regulatory supervisory framework for

these companies or should you come
up with something different so

for are these are questions that we
need to answer as the market evolves

I love the earlier conversation about
control over says innovation and

those trade offs and
I think there's no simple answer we will

keep having to make those
trade offs as it works for

the jurisdiction what I would
favor is a nuanced approach and

inclusive approach and I think that the
fact that many central banks in emerging

markets are doing Sun boxes should give us
comfort that they're willing to give these

companies sort of a playing ground
where we can just observe in

an environment of trust because they also
have to believe that if they come out so

to speak you wouldn't be using the
knowledge you have of the operations to.

Should I say.

Make it difficult for them to innovate I
think one of the things I didn't mention

is that usually when it comes to
innovation the companies are young

the a creative and operational risk
is not exactly what's on the mind

when they start or
other money wondering whether again.

That is what you expect of balun banks
of frankly come a long way you know they

probably didn't start this with years and
years sort of of that so from regulators

perspective we welcome this for
all of the good things they can do for

us in financial inclusion reducing
the cost improving access all the problems

around Id you know all those barriers or
address verification if technology can do

this for us yes but then we need to then
balance with all of these other concerts.

Yes that's what that will thanks for

that wonderful overview of the various
trends taking place in Nigeria but

you're also reflecting on some trends that
although you mentioned they are these

are largely your experience there isn't
as in other countries as well and

in particular I wanted to call one point
you mention and that is that the cost

savings that technology is driving saving
money on these transactions is not just

an efficiency thing it actually is
a powerful driver for inclusion

because if you look at the legacy banking
model you bricks and mortar branches and

agencies and so on it's very expensive to
build a brick and mortar banking network

but we've found and some of the research
we sponsored has found that when you move

to digital financial services you
can cut costs by 90 percent and

that means suddenly you can serve a much
larger population than you could hear

before it's much more profitable to serve
people who live in rural areas in remote

areas where you would never go and try to
branch but I wanted to pick up on your

point about innovation in the new
kinds of companies coming

into the space and also the impact that
they're having on the legacy companies so

Nigeria has a very interesting new banking
license that's been introduced and

I wanted to tell us a little bit
about the payment service bank and

what drove that decision yes well it's not
new I have to say because there's a lot

of excitement because I think with we're
waiting for Nigeria to make a it's so

decide how it's going to go where
sort of this big idea about

bringing new players in on what it does
for you know expanding inclusion so

the payments that his bank is our way of
bringing in more participants everybody

focuses on the telcos because it allows
the telcos in but it's actually beyond

the telcos it's looking at anyone that
has a channel that can be leveraged to

create more access so it's a super market
it's the retail of the big retailers

it's the mobile many companies which
in one Juhi usually have spent the last

since we license them about 10 years ago
building these agent necklaces with anyone

that has a network that can be leveraged
to get more people access when

we're talking about cost want I forgot
to mention was that increasingly we

see banks.

Expanding their a.t.m. sort of structure
what they're doing is expanding pos using

Agent because as cheaper and

technology is nimble it's easier to sort
of maneuver and deliver the service.

So the thinking behind the p.s.p.
even though you have about 63 percent

inclusion our target is 80 percent by next
year you still have a huge because of

the huge population you still have
huge opportunities in the excluded and

all we're trying to do is to get more
people access now with the license and

also serve institutions we
have micro finance banks for

instance where we have switching companies
we have payment terminal solution

providers we have all of these so
the regulations that have enabled new

players come in well one thing we
have found is that the pattern of

provision still usually revolves around
the open areas it is really concentrated

in certain areas so one of the problems
we're trying to solve with the p.s.p.

license because if you look at the with
the guidelines have been put it's supposed

to be technology driven it's supposed to
bring in more participants it's supposed

to be focused on 50 percent of say
they're going to build any physical

structures we want that 50 percent of that
should be in rural areas on the banks

areas under-served areas so it is
specifically focusing on this exclusion

problem in terms of access and track and
to monitor how well we're doing we're

just completing our financial access maps
that it's going to be an interactive map

that will show you know broadly speaking
what the opportunities are in terms of

financial access where we have our
banks where we have A.T.M.'s where we

have agents where we have ph beads where
we have and you know another thing about

the p.s.p. that I think is critical for
us to know is that the telcos come with

this establishments network that they've
been using to deploy value added

services now these are potential points
we can use to expand our id system for

instance when we have the id
system we came up with

Bangor official number a few years ago
we have 40000000 Nigerians on that and

we're looking to expand that across
the population now imagine if you had

200300000 more points where people can.

Go and so the register and

all that it totally opens up the
opportunities for those that are excluded.

We looked at the India model payment bank
model where most of the things we liked

about that was the fact that
you know the payment banks and

media are focused only on deposit
mobilisation at least for now

I think they have a 25 percent sort of
focus on the rural areas we have 50.

Some of the admission or things we put
in apart from increasing the sort of

minimums we want in terms of rural areas
is that we thought it was also important

what you were talking about
Leonardo about market power and

the the fact that if you have.

If a payment service bank has.

A parent that controls some
services across the chain you want

to ensure that it is providing the same
level of service across the entire

participants in the market
the last thing you want is for

some participants to get sort of better
pricing or better service and you know so

I and the guidelines sort of try to
sort of address a love a love that is

the only days we've just given approvals
in principle but we're very excited about

the potential given what we already
know about the the channels

you know that these organisations bring
and the variety that these organisations

Yes Well thank you very very detailed
view into Nigeria was going on there

we're not approaching it up as look at the
global perspective and think a little bit

about the public policy challenges that
we're facing now as regulators and

powers to be honest thinking about
some of these issues or Goble of all.

Well.

We we consider them.

We consider for
Financial in financial innovation at.

The center of our term strategy so

indeed that is b.s. 2025 innovations so

they do that really reflects a so
a commitment of of the b a s a to

breeze continue seeing the vision
to prepare the b.s. itself or for

the change of more sort we we we're
doing do seem to him to France

one he said to be in Aberdeen what we
provide for a central bank community and

an example is to support
the central banks that are doing.

Very well.

In the case of the Central Bank of
Nigeria the other easier to innovate

ourself in terms of how we operate
as an institution saw and so we see.

Into internally as a change indeed
the one element of our strategies

that the creation of the b.s.
innovation our book and these.

3 main goal to the 1st one is
to eat into fi and develop a.

Critical transit in the financial
technology that of relevance of

the central banks are the 2nd goal
easier to develop public goods or

in particular just be so.

That are geared towards.

Improving over the financial
difference the system.

And the global globally to produce
efficiency and then to serve as a focal

point for a network or Central Bank
expert on the Malaysian so as.

The as we know the revolution.

Knows no borders we look at it in
different parts of the globe you could be

in multiple locations on Kong or
Singapore and Barsel its unique.

And other initiatives to force policy and
to do research that could try to.

Answer some of these are relevant
policy question and.

And indeed the ignition of the unit I'm
leading the innovation digital economy

unit responded to these 2 Disney there and

we have a number of projects
that are currently in

development in areas such as well
one needs a big tech in finance and

the impact in terms of
competition the 2nd one is.

Talking edition of our sets Center event
digital currency global c will call on

how these will impact in the future
the mother he sent to Daria easy

money in general our financial innovation
could impact on the market economy and

the conduct of monetary policy and
that the last one.

Point that it was also mentioned this
morning many times into the panel.

That all of the.

Soup techer and Gov Teka And what do
you all are one example is out of the.

Firms that take part to ascend boxer if
he is impacting their exposed performance

these are just a natural a few elements
of our 3rd a-g. for the medium term.

To analyze.

Financial innovation and technology could
impact on the work of central banks so

there's really exciting and

fascinating to see that the B.A.'s which
I think it is was very conservative

organization is actually pushing
forward with ideas about innovation and

trying to rethink things and when I heard
Governor Mr Parsons the manager and b.s.

talk about these things in the past and
so Steve things you mention mentioned Lee

this off probably goods which the b.s. is
long done in terms of center setting and

so on but
just like that hard public goods and

do you have an idea what he means by that
is you talk about actually software and

that's of the not the infrastructure
of are actually those example that

Asia was measuring So
we need that to not to forget to the fact

that center banks create a trust
us independent system and

the public infrastructure is very
important this morning that will source

for discussion in the panel about the
experience of India with the digital age

the and the payment
the infrastructure of the created so

in a way the goal of central
banks use it to reinforce.

These aspects in order to create
a very solid environment for

the financial system in
the future yes thank you so

government is one if you could respond to
that do central banks have are all to play

in promoting innovation themselves
the short answer is yes.

The long answer is where does it stop
where does it start with a stop you know

so the legal framework Lisa be
in there the regulation and

the policy they should do that they should
provide some of the utilities that my view

I know there is sort of 2 camps in that
respect because we've heard this morning

about what are some of the potential
pitfalls if they provide utilities and

sort of the power to
sort of take them away.

There should be at the forefront of
innovation because of all the reasons I've

mentioned all the benefits we've talked
about the fact that inclusion is quite

high into the mandate so if it's going to
help you achieve the money down even if it

wasn't in inside the Mandy The truth
is that it does help you Foster

of the financial and the monetary and
the price stability that you need so

we will definitely as regulators need
to be sort of very interested at

that the jury's out as to at what point.

We allow the market.

To self regulate I don't know
if that time would ever come

where the market can sort
of by itself just go eant

you know do this Luckily we're
having this conversation and

when I meet other central bankers
you know I'm happy to know that

we're not the only ones grappling with
what these choices so there should mean.

A lot of the emerging market
economies that leapfrog some and

developed ones in terms of embracing
technology because of the real issues that

need to be to be resolved and them I think
they will these economies will be the test

case for how well this sort of is going
to work that's why it's what were for

us to provide infrastructure for instance
set up a central street set up a central

deposition tree you know make it fit for
purpose for everyone to sort of plug in

you know they could become officials about
a single source of failure you're right so

when that comes up you you come up with or
the other solutions I heard

from one of the colleagues yesterday
about what deity can do to to resolve

this region like better technology can do
to resolve this single point of failure

sort of issue so as we sort of
walk down this road I think that

we as regulators will always keep
our eye on on the pitfalls and

the risks and find ways to sort of.

On combat then if you look at major
experience all of the regulations that

we've come up with is what has enabled
these companies to thrive let's not forget

without the licensing without the rules
without the guidelines they won't be even

there for us to see us today so you can
take today you can take the central banks

out of the conversation about innovation
Yes I think what needs to happen is that

at what point do we get to where
we see Ok it's time to hand over

his marker what a wonderful way to sum up
for conversation both in the session as

well as for the most of the conference and
I think your time perhaps or one question

one question what is a very short question
yes so if you raise your hand you must

promise you can ask this question in
one sentence no run on sentences.

Well the monitors mission mechanism
where we will be definitely affected by.

These changes in the in the last lied and

if you refer to the last slide of
the slide on the money market funds but

in both cases there is an effect on
the money that is mission Meg and

it's because a in one case the keys are.

Correlation with respect
to their surprise.

We have in mind in the traditional

microeconomic model definition
accelerator So this means that when for

example there is a monetary tightening
there is an effect on on house prices.

With.

The u.s. mission in keys of big credit or.

Is a fact that are.

Not employees simply because
they don't rely on collateral so

these means that the credit
will be moderate correlated we.

Traditional business cycle so
this could be an implication for

a little submission mechanism and
a 2nd aspect related to the slide

on the money market fund
there we can see that

there is a complex relationship but that
that's to be fully understood because a.

There is a sort of a connection
between the big tech and

the bank in terms of there
are certainly abilities so these.

Will be an Eliza deeply also in
relational we did a different.

Kind of 36 for example.

People but Bank of China was a was aware
of these effects on the floor of the.

That was.

You know we.

**** up the Net by the creation
of 100 percent of a server

that now a big company south.

Of to deposit with with
the Central Bank So

this is just an example to show
you that the central banks.

Are Where are starting to get to be to.

The effect of technology that a sponsor
is not that naive as to be really

well crafted and it really depends
on the situation I learned

that in 6 So let me get encourage
you to read Leonardo's paper on this

subject of the big tech in finance so
with that let me just sum this up very

quickly by saying that with today at
the session we have learned that and

we know that innovation can
help us to serve the poor and

a broader section of the population
better innovation can change

the players in the marketplace including
the legacy players and central bankers

can drive them an innovation here we have
to actually examples of central bankers

who are driving innovation in both at the
global level and at the national level so

please join me in thanking both Leonardo
and deputy governor mother joining us.