If incumbents depend on Bigtechs for key infrastructure such as cloud computing, if they rely on the same Bigtech to distribute their products through their platforms and then compete with Bigtechs on certain segments, they see their strategic independence challenged in the same way as hotels and retailers did. This process of commoditisation of incumbents may lower credit standards to compensate for higher pressure on margins and exacerbate their funding gap because of lower customer stickiness. Second, the question of cyber-risk. With greater interconnections between technologies and the financial system, the Banque de France observed in its Financial Stability Report of December 2017 that cyber-risk is moving from an idiosyncratic risk to a potential source of systemic risk which need to be addressed. This perspective is widely shared among public and private decision markers and it should not come as a surprise that cyber-security will be one of the priorities of the French presidency of the G7 next year. Third, the question of market structure and private monopolies, in particular as regards clearing services. In Europe, this topic has a specific dimension that results from the Brexit 6/9  outlook. The clearing of interest rate derivatives deserves in particular attention since the UK clearing houses have a virtual monopoly in the sector. Beyond handling transition issues in case of a “hard Brexit” we must ensure that critical key players do not become “too big to fail”. Of course, by its very nature clearing is an activity that generates major economies of scale, and thus encourages concentration.

The asset management industry plays a key role in the economy by channelling savings towards investment, both for companies’ and governments’ capital needs. In other words, asset managers play an important intermediary role in the financial system. In 2008, assets in the fund industry amounted to about EUR 13 trillion. Ten years later, the outstanding amount of assets is more than 3 times higher at EUR 42 trillion. Half is located in the United States and about 35% in Europe.1 The asset management sector is the largest component of non-bank financial intermediation defined by the Financial Stability Board as “credit intermediation involving entities and 1  Sources : EFAMA, International Statistical reports  4/9  activities outside the regular banking system”. It’s true that in many respects, investment funds have bank‑like financing activities: they don’t collect deposits but they do collect funds, they carry out liquidity and/or maturity transformation and, in certain cases, they perform their intermediation with leverage. And like banks, more than two-thirds of investment funds (in asset value) are susceptible to runs.2 I would like to conclude this first part of my speech by some anecdotal evidence showing how the traditional bank-centric intermediation model is shrinking, while a more diversified intermediation model is gaining traction: -  in 2010, 60% of the new leveraged loans (that is, loans made to indebted corporates) were granted by banks in Europe;  -  in 2018, 69% of the new leverage loans were granted, not by banks, but by asset managers.