part of their portfolio against the prospect of protecting the rest of their investments from the fallout of a credit crunch that would follow the disorderly demise of a distressed lcfi. the cross - border dimension the other big issue is how to handle the resolution of internationally active banks. this is a challenge even for fairly vanilla commercial banking groups. there has been a basel concordat on how home and host authorities should co - operate in supervising international banks since 1975. it was updated in 1983 and 1992 to take account of group - level consolidated supervision following the failures of banco ambrosiano and then bcci. but was the concordat based on a false premiss : that the division of supervisory - labour during peacetime can carry smoothly over to the only period that really matters, distress? because, as it happens, neither standard resolution regimes for commercial banks nor any super - srr of the kind i have just outlined for going - concern restructurings could be applied easily to the cross - border activities of lcfis. srr tools cannot automatically be applied extraterritorially. it seems to me that policymakers need to face up to, and decide whether or not to fix, the really big issues about how insolvency and resolution laws are applied to internationally active financial companies. broadly speaking, countries ’ laws apply either territorial principles to international insolvencies, consistent with separate procedures for each of a bank ’ s entities in different jurisdictions ( so - called “ separate - entity resolution ” ) ; or universal principles, consistent with a single procedure applying to the resolution of an international bank and its branches abroad, wherever they are located ( “ single - entity resolution ” ). i believe that top - level policymakers have to choose what kind of regime they want. this issue needs to be elevated above the level of middle - ranking technocrats where, through no great fault of their own, it has wallowed for too long. the issues were articulated as long as 20 years ago, following bcci ’ s failure. 2 nothing much has been done globally. so in the second half of my remarks today, i just want to sketch why this problem arises. ( i ) territoriality territorial approaches to resolution are adopted due to potential conflicts of interest between home and host - state authorities. these may reflect, for example, host countries not wanting to rely on home countries to act in the interests of financial stability in the host country ; or different or conflicting triggers and objectives for special resolution regime powers

##ography have enabled the issuance of private crypto - currency. in particular, bitcoin and its underlying enabling technology, the blockchain protocol, has created the capability to exchange value on a peer - to - peer basis. in the words of thomas carper, a us senator, ‘ virtual currencies, perhaps most notably bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us ’. according to the website coinmarketcap. com2, the total market capitalisation of more than 800 different virtual currencies is about us $ 146 billion, of which bitcoin makes up approximately 47 %, followed by etherium, ripple, and litecoin3. this is still significantly lower than the current value of all money ( approximately us $ 84 trillion ) or physical money ( approximately us $ 31 trillion ). although much lower in value, virtual currencies are emerging as a new form of money and / or a new ‘ store of value ’ that is ‘ held ’ within a network of computers. the underlying technology, such as the distributed ledger technology ( dlt ), although immature and still needing to be fully proven, could serve as a means to possibly reshaping financial services. potential applications include general banking activities, trade finance, insurance, and payments. however, virtual currency is not without controversy. according to a paper issued by the financial action task force on money laundering ( fatf ) in 20144, one of the challenges facing regulators, the private sector, government as well as law enforcement agencies is the lack of a common understanding of virtual currencies, including how virtual currencies operate, the potential risks associated with them, and the vocabulary used to talk about them. https : / / coinmarketcap. com / charts / www. coinbase. com http : / / www. fatf - gafi. org / media / fatf / documents / reports / virtual - currency - key - definitions - and - potential - aml - cftrisks. pdf page 4 of 11 payments the second set of innovations that affects financial services is the transfer of value undertaken through the effecting of payments. due to its nature, the payment environment lends itself to being a ‘ natural testing environment ’ to allow for developmental innovations such as fintech. attention has been drawn to innovations such as samsungpay or applepay, which have created the ability of