Financial systems continuously need to adapt themselves to the rapidly increasing technological innovations. This also includes new products, necessitating increased awareness by the users and supervisors of the risks and benefits inherent in them. At this stage integrity and accuracy of data comes forward to facilitate risk management by the institutions and effective supervision by the regulators. The supervisory authorities increasingly need to be proactive and concentrate on consolidated supervision. In my opinion, it is crucial for policy makers to be aware of the dynamics in the highly correlated markets. Creating widespread transparency with regard to their objectives; identifying risks; sharing views with financial market participants to increase their awareness of risks and to act accordingly; starting or promoting initiatives to reduce the financial system’s vulnerability to crises and to reinforce financial infrastructure, especially in the field of payment services and securities settlement should be given priority. International initiatives ease this process by specifying best practices and defining principles. In these international platforms, we find the opportunity to cooperate and exchange information. As we would all agree, although it is highly comprehensive and demands our devotion, Basel II is a significant step towards that end. There is no doubt that the main pillar of Basel II regarding capital adequacy is a core requirement for the financial soundness of institutions. However, I want to point out the importance of its two other pillars. Supervisory Review is very essential to evaluate an institution’s risk management. Complementary to this is the effective corporate governance in an institution.

Interoperability across systems and operators merits continued focus. Big technology companies, or BigTechs, have so far offered services to end-users overlaid on top of traditional payment infrastructures. They can also have an interest in offering their own currency and payment systems. One example is Libra, backed by among others Facebook. Regulation of such systems will be important if we as a society are to secure the benefits of these new solutions while limiting the associated risks. The European Commission recently presented legislative proposals for an EU regulatory framework on crypto-assets as part of its digital finance package. As an EEA country, Norway will also be affected by this framework. Globalisation is about more than BigTechs entering the payments market. Payment infrastructure providers are also undergoing structural changes. Global operators are taking positions in Norway and the Nordic region. Mastercard will be acquiring many of Nets’ services and will be an important provider for Norway’s payment system. Central bank digital currency Structural changes in the payment landscape raise questions around whether there is a need for Norges Bank to implement measures to ensure that payments can continue to be made efficiently and securely in NOK in the future. A central question is whether Norges Bank should provide central bank money to the public in digital as well as physical form. Central bank digital currency – CBDC – will be both a new type of money and a new payment system. CBDC, like cash, is a claim on the central bank.