but the risks should not be underestimated innovation brings new threats for the financial system that have to be carefully dealt with : first, it raises challenges in terms of fraud and security, given the multiplication of actors involved in payment and financial processes, the higher circulation of personal data as well as the multiplication of potential “ points of failure ”. these new “ cyber ” risks are an acute concern for the whole industry, including for a mature technology such as internet card payments which accounts for more than two thirds of all fraud losses on card payments in france. thus “ younger ” technologies that may not have been tested yet, such as the blockchain, and might generate new security risks, deserve early and extended scrutiny. second, it could endanger financial stability over the longer term, as a result of the process of increased automation that we have seen during the last few years. the development of high frequency trading for instance – whose economic utility is by the way also questionable – could hamper the resilience of financial markets in times of stress. new services such as smart contracts embedded on a blockchain could create new shock transmission mechanisms or result in new forms of interconnectedness or pro - cyclicality that could be the sources of financial instability. third, it could threaten market integration, especially in europe after a decade of tremendous efforts to foster harmonization between financial markets. such efforts are evidenced in the securities markets area, by the recent launch of the target2 securities platform in 2015, in the payments area, by the completion in 2016 of the second round of the sepa project which now allows for fully harmonized credit transfers and direct debits denominated in euros, throughout the european union. by contrast, the current profusion of new technologies, standards and protocols that are not fully interoperable, at least at this stage, constitutes a potential risk of market fragmentation. additionally, they could lead to some kind of social fragmentation, if the new payment means are less accessible to the less welloff. 3. against this background, public authorities play a key role in helping to reap the full benefits of innovation while preventing the threats it brings this implies first rethinking the regulation so as to strike the right balance between innovation and security. several objectives have indeed to be met : maximizing the spillover effects of 2 / 3 bis central bankers'speeches innovations, protecting the consumer and addressing financial stability issues, and ensuring that innovation is beneficial to all parties, in particular in

on. the way the whole economy functions has of necessity changed since the post - war period and it is unlikely that the current economic policy regime with a floating exchange rate and inflation target can deliver both 2 per cent inflation and an unemployment rate equivalent to the levels we had then. during the post - war period we had a unique expansion in public sector employment and very high demand pressures, something that was not sustainable in the long run and that is not possible with free movement of capital, an inflation target and an independent riksbank.