a better market infrastructure, to implement more accurate and reliable techniques for the control of risks, to reach more distant and diversified markets, and to multiply the value and the volume of operations. in short, new technology has radically transformed all three major functions performed by banks, i. e. access to liquidity, transformation of assets and monitoring of risks. a new phase is presently at work with the emergence of e - money, e - banking and e - finance. it is clearly this new development which will represent the great challenge of the coming years. the speed of adoption of these new products remains difficult to forecast. contrary to the preceding phase, this new wave is not limited to professional operators but involves all customers, including the retail market. many of the scenarios suggested by it firms or consulting groups have proved to be overly optimistic. at the same time, it would be wrong to become complacent. most new technology is spreading following an s - shaped curve. the base section of the s can be quite long and practically horizontal ; however, it will sooner or later be succeeded by a steep section. the example of nordic countries, and more specifically finland, shows how quickly e - finance can develop, once circumstances are ripe. it is important to emphasize that the integration of new technology into the financial sector did not take place in isolation. rather, it is the interaction of technology with another major development, deregulation, that contributed to reshaping the financial landscape. true, the pressure of the market to fully exploit the new technologies was strong, probably even irresistible. however a receptive environment had also been created by a lifting of the rather strict financial and banking regulations which were still prevalent at the end of the seventies. the increased awareness of the wide - ranging possibilities offered by new technologies illustrated that a lot could be gained through the removal of distortions in competition, directly linked to excessive regulation or intrusion from the government. in combination, these two evolutions contributed to the emergence of a more open, competitive and globalised financial market, which obviously improves efficiency in the world economy. the transition, however, has not been a smooth one. it was not easy for the authorities who had to cope with the more frequent arbitrages operated by market participants between the various currencies and financial instruments or even between different legal, regulatory or tax regimes. neither was it easy for financial intermediaries that had to work in a much more competitive environment where traditional protection and barriers to

supervision, usually the supervision of credit institutions, while one or more separate agencies supervise the other financial intermediaries and the markets. i consider that what we might call the intermediate model resulting from the law of 2 august 2002 is a fairly good combination of these two main models, and it is fair to say that this belgian design could be a source of inspiration once it is considered necessary to set up prudential supervision arrangements at european level. in any case, the reform has attracted favourable comments both from the european central bank and from the international monetary fund. the new set - up is headed by the financial stability committee, which now combines the management boards of the bfc, the iso and the nbb, alongside the financial services authority supervisory board, which will combine the supervisory boards and council of regency of the various institutions. as regards the financial stability committee which is being installed today, in accordance with the intentions of the legislature i see it as : • the pilot for the collection and development of expertise relevant to the professions of both supervisor and central banker ; • a place for dialogue and consultation, certainly for providing warning of financial instability but also, if necessary, for managing such situations ; • a body in charge of organising certain synergies between the three institutions ( tomorrow it will be two : the bfic and the nbb ), in order to achieve economies of scale in their operation, all without affecting the specific responsibilities of each institution. to quote an expression used by my colleague at the european central bank, t. padoa - schioppa, macro - and micro - prudential supervision are nowadays two sides of the same coin : distinct but inseparable. the central bank, traditionally in charge of macro - financial stability, as well as being the bankers ’ bank, must not be cut off from information about the conduct of the few major players who dominate the financial scene and whose failure - should it occur - could have systemic consequences. similarly, the body or bodies in charge of micro - prudential supervision have the advantage of being able to suit their action to the relevant macro - economic context. the many shocks which the world financial markets have suffered in recent years are sufficient demonstration that financial stability cannot be regarded as an established fact. even though, very fortunately, no major problems have ensued for individual players or for the systems as a whole, these events have confirmed the need to reinforce the resources devoted to the preservation of financial stability at macro and micro level. in belgium,