The national infrastructure will foster competition in the market, encourage new financial ecosystems and, as a result, provide cheaper and better quality products to the public. What elements are included in the national infrastructure? Remote identification for both financial and public services. We are working on this with the Government. This involves creating a platform for instant retail payments so that consumers can easily make payments and transfers regardless of where they hold their account. It also involves creating marketplaces offering financial products and services to individuals and helping them to choose cost-efficient and safe purchases. Lastly, it involves developing the national payment system. It is our aim to create an entirely new payment infrastructure type for Russia. What is more, effectively countering cyber threats is increasingly important. We’ve seen malicious programs paralyse even the largest companies for hours and days. This year, the congress will include a session devoted entirely to information security in the banking sector (more generally in the financial sphere) for the first time. Our near-term priorities include establishing information security standards for financial institutions, continuing work on identifying threats and helping the market to develop effective strategies to deal with cyber-risks. I would like to add a few words about regtech. Up until now, all financial regulation and supervision mainly concerned prudential aspects: capital, liquidity, profitability, and asset quality. The shift that digitalisation brought about in the financial industry touches not just on the emergence of fintech companies but also the widespread use of new technologies by existing financial institutions.

Although, as recent years have shown, our economy has learned to adapt to external shocks, there are nevertheless a host of internal factors that leave us rather exposed. These include low economic diversification, insufficient flexibility of institutions and rules, a weak competitive environment (where new companies find it hard to enter the market and those lagging behind economically continue to do so for a long time). As a result, even given the potential for growth (which, as you know, the Central Bank estimates at 1.5-2%) there will potentially be significant fluctuations in output in the coming years. Therefore, there is an urgent need for structural changes that will raise the bar of potential growth above 1.5-2% and make it sustainable. The financial sphere is also in need of such structural changes. What policy response are we seeing in the face of these challenges in the financial sphere? 2 / 11  BIS central bankers' speeches  Above all, focus should be on maximum flexibility. Certainly, the floating rate should be upheld. It is crucial to adjust and constantly re-adjust regulation in established and new spheres based on the principles of proportionality to risks. Since rules quickly become outdated, it is important to gradually transition from management guided by rules to management by principles. Greater attention should be paid to systemic problems and risks, not just to the stability of individual institutions. Adopting the principle of countercyclicality, using macroprudential tools. Early warning of problems both in the system as a whole and in individual institutions.