Indeed, sometimes when I hear of democratising finance, spreading risk in capital-light originate-to-distribute models, I think I haven’t been this excited since the advent of sub-prime. FinTech could also affect the conduct of monetary policy. Unbundled banking would change the roles of bank capital and funding costs in the credit channel of monetary policy. If FinTech enhances participation in financial markets, the wealth channel of monetary policy could strengthen. More broadly, Big Data techniques could tell us about the state of the economy more accurately and promptly. Forecast performance could improve, akin to the forecast improvements that better measurement of atmospheric conditions has, over time, delivered for meteorologists. may help to lower the compliance costs which major banks say have been a factor in their decisions to withdraw from correspondent banking. And in time, FinTech may broaden the pool of non-banks able to provide individuals and companies with viable alternatives, but for now banks continue to act as gatekeepers to payment and settlement in central bank money. BIS central bankers’ speeches  3  My own forecast is that FinTech’s consequences for the Bank’s objectives will not become fully apparent for some time. Many of the technologies needed to deliver such transformations are nascent – their scalability and compatibility untested beyond Proofs of Concept. Moreover, the bar for displacing incumbent technologies is very high. Nor will the Bank of England take risks with the resilience of the core of the system. Disruption won’t come either easy or cheap. 4.

However, the ability of Asian banks to continue to take up the slack could be constrained by the already high loan-to-deposit ratio and limited access to US dollar funding. More importantly, it is doubtful whether these non-European banks would have the appetite to take up long-term project and infrastructure financing, which is a specialised business traditionally dominated by the European banks. Any cutback in infrastructure financing could have serious repercussions for developing Asia, which has a strong need to build and upgrade infrastructure networks to promote sustainable growth, create employment opportunities and boost competitiveness. ADB estimates that Asia requires as much as $ trillion in overall infrastructure investment between 2010 and 2020, with an average of $ billion in annual infrastructure spending. It is therefore vital to further develop the capital markets in Asia, in particular the local-currency bond markets, to effectively channel the region’s vast savings to meet its huge demand for infrastructure financing. Asian governments have been making efforts to develop the bond markets. At the national level, initiatives such as consolidation of issuance in a few benchmark maturities and development of interdealer markets have helped increase liquidity and improve reliability of yield curves in a number of jurisdictions. Meanwhile, collaborative efforts are being made in regional forums. A notable example is ASEAN+3’s Asian Bond Markets Initiative with the strong support from ADB. The Initiative has been looking into both demand and supply side issues pertinent to the development of the bond markets.