I am particularly pleased to be doing this at a Lecture held in honour of a man who dedicated his life to these goals. Pre-crisis wisdom For a decade before the crisis, the conventional belief was that globalisation was an unmitigated good. The dramatic success of the Asian tigers had shown that openness to trade and foreign investments was a key source of economic growth. A 1992 World Bank study on the “East Asian Miracle” credited their success chiefly to market friendly and outward oriented policies. There was broad intellectual consensus, including in the multilateral institutions, in favour of free markets: put simply, deregulation, privatisation, and trade and financial liberalisation were always good, and the faster the better. This was what John Williamson called the “Washington consensus”, but the view went beyond the US Treasury, the IMF and World Bank. One important element of this intellectual consensus was the liberalisation of capital accounts. Free trade in goods and services had enabled countries to exploit comparative advantage and international division of labour, and produced half a century of unprecedented global prosperity. It was argued that in the same way, free flows of capital would open new avenues for deploying savings and funding investments, and promote more efficient allocation of resources. Financial markets were globalising, driven by technology and deregulation. The faster countries plugged into the global network, the more they would benefit. The pre-crisis consensus did acknowledge the risks associated with open capital markets.

However, they do not benefit from the same regulatory safeguards that aim to put a limit on those risks and to ensure that they are properly recognised, monitored and managed. Moreover, crypto-asset infrastructures and activities, beyond expanding outside the regulatory perimeter, have done so by including products, services and practices that carry certain specificities. From a risk perspective, these specific features may either amplify traditional vulnerabilities or introduce new ones, and should fall within the scope of regulation and supervision. Let me illustrate this point with two examples. The first concerns financial integrity risk. Attention should be paid to this risk for two reasons: first, because, as shown by our supervisory experience at the ACPR, AMLCFT controls by service providers appear to be difficult to grasp and master, and are sometimes not performed in the crypto ecosystem, and second, because investors have the possibility of using and holding crypto-assets pseudonymously. The second concerns cyber risk. It is currently the number one operational risk for financial players, and it has the ability to jeopardise the stability of the entire financial system. The exposure of the crypto ecosystem to this risk could be exacerbated by its technical specificities, including the recourse to blockchains, and the introduction of new points of vulnerability such as bridges between blockchains and so-called oracles that feed data into blockchains. In my opinion, the repeatedly successful cyberattacks aimed at crypto players are a warning signal that should capture the attention of regulators and supervisors.