is an american way of business, a french way, an italian way, and a chinese way. in fact, such diversity makes the world very rich, in the same way as we enjoy japanese food, chinese food, french food, italian food, and american hot dogs and hamburgers. as far as financial business is concerned, however, i think there are a number of similarities between japan and the united states. by this, i mean not only a growing similarity in terms of financial businesses in recent years, but also plenty of similarities in terms of financial developments in history as well. i am referring to not just rosy episodes but also painful experiences. united states from the 1970s through the 1980s, the us financial system weathered several seismic difficulties. failures of franklin national bank in 1974, penn square bank in 1982, and continental illinois national bank in 1984 are particularly memorable. the latin american debt crisis in 1982 put enormous strains on us money center banks. over - stretched investment boom was one of the culprits for the savings & loans ( s & l ) debacle in the late 1980s. in the wake of traumatic experiences in the 1970s and 1980s, the us regulatory framework was revamped to better prepare for future contingencies in the financial system. the enactment of the federal deposit insurance corporation improvement act ( fdicia ) in 1991 marked a watershed in the regulatory context. in the 1990s, deregulation for financial business progressed, prompting large - scale consolidation among us financial institutions such as the mergers of chemical bank and chase manhattan bank ( 1996 ), travelers group and citicorp ( 1998 ) and chase manhattan bank and jp morgan ( 2000 ), to name just a few examples. according to a study by finance ministry and central bank deputies of the group of ten ( g10 ), the united states accounted for nearly 55 % of the merger and acquisition ( m & a ) activities in the financial industry during the 1990s, centering heavily on the banking sector. this trend to consolidation continues in the 21st century. us banks ’ stronger earnings and capital base have given a further boost to consolidation, including the creation of a financial colossus by jp morgan chase ’ s recent marriage with bank one ( 2004 ). primary motives behind the current wave of consolidation are revenue enhancement by synergy as well as its stability through product and geographic diversification, in addition to cost savings through economies of scale. increased competition and stronger pressure from shareholders accentuate the urgency of revenue enhancement for many

is growing. in particular, young customers ( e. g. the millennials and generations y and z ) require progressively more customized and integrated services usable through apps and ‘ super - apps ’. digitalization can increase the financial inclusion of previously underserved groups of consumers, easing their access to financial services. public institutions and authorities are leveraging digital innovations to fulfil their mandates, including combating money laundering and terrorism financing and preserving financial and monetary stability. alongside important opportunities, digitalization poses considerable challenges for traditional intermediaries and for regulatory and supervisory authorities. the former need to keep up with the increased competition, as mentioned before, and with new kinds of risks, as well as the evolution of the traditional ones, such as cyber and operational risks, associated with the digitalization of financial services. i am also thinking about governance, profitability, capital adequacy, compliance and financial stability in a broader perspective. moreover, many of these risks are cross ‑ sectoral in nature, and they therefore require coordination and cooperation with other international fora and standard - setting bodies. one example is how digitalization makes financial and payment services more efficient, but increases their vulnerability to operational risk and in particular to cyber ‑ attacks on the critical infrastructures powering payment systems and financial markets, including up ‑ and ‑ coming dlt - based infrastructures. the vulnerability of financial and payment systems to hacking and theft increases financial crimes, such as money laundering and other illegal activities, at cross - border level as well. the authorities need to reconcile the promotion of innovation with the need to safeguard consumers and investors, avoid the exclusion of or discrimination against less digitalized users, ensure the proper functioning of market infrastructures and payment systems, and preserve the safety and stability of the financial system and the economy as a whole. over the next few years, these challenges may call for a profound reshaping of our supervisory methodologies and toolkit and for substantial investments in new skills. it is extremely important that supervisors develop proper competencies to understand the risks ( it, operational, reputational, but also in terms of strategic / business model risk ) that may arise for the supervised entities. 2. intermediaries looking for a balance between resilience and adaptability : in this challenging environment, reaching a balance between adaptability and resilience is becoming an extremely important task for the financial system as a whole. in preparing this speech and reflecting on the terms ‘ resilience ’ and ‘ adapt