markets has contributed to over - optimistic assumptions for market liquidity conditions and led to a great reliance in rating agencies. • second, in the past, liquidity risk management had not been at the centre stage. most improvements in liquidity risk management were tailored for each country. today, there is consensus among supervisors and the banking industry that liquidity risk management needs to be upgraded to capture the implications of a more globalized financial system and the rapid growth in financial innovation. • third, the originate - to - distribute model encountered several shortcomings : the suboptimal incentives in the chain of origination, acquisition and distribution led to a poor assessment of risks, based on the expectation that credit risk could be quickly transferred through securitization. another important weakness was the inadequate information on products and the quality of underlying assets. moreover, the model ’ s dependency on market liquidity made it extremely vulnerable. • fourth, recent events that have led to changes in the implementation of monetary policy through open market operations. g10 central banks took coordinated measures to bring money market rates back down to target levels. • finally, from our specific experience at the dutch central bank, i must add that the combination of central bank and supervisor led to a successful internal communication structure and to timely interaction with the financial industry during recent events. follow - up issues to conclude, the pace of financial developments has accelerated with financial globalization. consequently, we must remain exceptionally alert and flexible to encounter adverse dynamics that may threaten financial or economic stability. in my opinion, developments that should be followed closely are the strengthening of risk management and the implementation of basel ii. there are other interesting issues to follow - up such as the role of sovereign wealth funds in a context of globalized financial markets. i trust that the panellists will focus on this and other interesting issues in the coming hours.

decline in the demand for cash is mentioned. this scenario relates to our core central bank functions, which is one of the main reasons why our colleagues in sweden have been dealing with the topic for quite some time. if payer and payee simply do not want to handle cash anymore, then a pure reliance on private companies for electronic payments could bear risks or could also exclude some parts of society. furthermore, beyond a certain point, such a trend could hamper the provision of adequate cash services. european citizens would thus encounter difficulties in accessing the only means of payment that is provided by the public sector. moreover, the issuance of general purpose cbdc might support the ongoing digitalisation. there is a huge expectation that, in the future, machines or devices will interact fully automatically and autonomously. therefore, a digital euro which could be transferred in real time between two devices – offline and 2 / 5 bis central bankers'speeches embedded in smart contract environments – might be an option as an efficient and generally accepted means of payment supporting those innovative use cases. of course, in a market economy, it ’ s the primary task of private actors to develop innovative payment solutions. these solutions might offer state - of - the - art technology in order to address the needs of the market as regards usability, convenience, speed, cost efficiency and especially programmability, amongst other things. however, payments are a network industry, and, naturally, this could lead to a highly concentrated market. in connection with the inherently commercial interests of private players, this could result in undesirable consequences for consumers. such developments would foster innovation, but could also threaten european financial, economic and, ultimately, political sovereignty – especially if those solutions come from outside of europe, and become widely used for european retail payments. therefore, we have to think about the role of the public and the private sector in the financial ecosystem in general – both of which should, of course, play a part. in addition, there is also the idea that some obstacles to cheaper and faster international payments could be overcome by the issuance of cbdc on the basis of new, and to a certain extent, globally standardised, dlt - based networks. 5 should these developments motivate us to introduce cbdc? in fact, cbdc is one of several non - exclusive options, some of which may be more obvious or easier to implement. but, given the rapid pace of technical progress, we should be able to act