adjusted at different stages of the credit cycle. in addition, the bank sets borrower - based measures ( bbms ), which places ceilings on the level of debt that can be incurred by individual households. our current bbms place ceilings on the loan - to - income ( lti ) and loan - to - value ( ltv ) ratios in relation to mortgages, which are intended to improve the resilience of households and banks to withstand future reversals in housing market conditions. in relation to the prudential regulation of banks, there has been considerable progress in developing a banking union in europe. in particular, the single supervisory mechanism ( ssm ) of the ecb is now responsible for supervision in the euro area and is the direct supervisor for the largest banks, including the main irish - resident banks. in practice, the ssm operates through joint supervisory teams ( jsts ), which are led by ecb staff but also include staff from the national supervisor – in ireland, we are the national competent authority for supervision of not only banks but also insurance firms, investment firms and a broad range of other financial intermediaries. the supervision of non - bank financial firms remains a national responsibility but there is 1 / 2 bis central bankers'speeches significant coordination through the work of the various european supervisory authorities ( esas ) : the european banking authority ( eba ) ; the european insurance and occupational pensions authority ( eiopa ) ; and the european securities and markets authority ( esma ). the staff and leadership of the central bank of ireland contribute to the policy discussions of the esas, through committee work and membership of their governing boards. a second element of banking union is a common eu - wide approach to the recovery and resolution of banks, which is laid down in the banking recovery and resolution directive ( brrd ). each country now has a national resolution authority, with a lead role played by the paneuropean single resolution board ( srb ). in ireland, we also have taken on the mandate to act as the national resolution authority which involves the development and, if required, the execution of recovery and resolution plans for banks and investment firms. a third element of banking union is the establishment of a common deposit insurance system. this is a multi - stage process which remains under discussion. for now, the common eu rule is that deposits are guaranteed up to a limit of €100, 000 but the funding and management of deposit guarantee schemes are a national responsibility : we

conference on opportunities and challenges of the tokenisation of finance paris, 27 september 2022 anchors and catalysts : central banks ’ dual role in innovation speech by francois villeroy de galhau, governor of the banque de france press contact : mark deen ( mark. deen @ banque - france. fr ), deborah guedj ( deborah. guedj @ banquefrance. fr ) page 1 sur 5 ladies and gentlemen, it is a great pleasure to welcome you in the louvre for this conference organised by the banque de france. i am honoured by the presence of commissioner mairead mcguinness, of my most distinguished peers at central banks, and of prominent representatives of the public and private sectors. i trust this unique blend of skills will offer a comprehensive overview of the topic that will keep us busy : the tokenisation of finance, and the role of central banks in it. let me just recall what i describe as the “ triangle of disruptions ” i : new players ; new settlement assets based on blockchain ; and new decentralised market infrastructures. these disruptions offer the potential for cheaper and faster services. however, they could also lead to fragmentation and to systemic risk. how can we collectively reap the “ net benefits ” from innovation? that will only be possible if we come out on top of two false contradictions. the first apparent oxymoron opposes stability and innovation. financial stability implies that the financial system is capable of withstanding shocks, so as to avoid impacts on the real economy. but it does not mean stagnation or paralysis, and does not ban innovation in any way. on the contrary, financial stability creates trust, which is an imperative for innovation to last. well - tailored, consistent and evolving regulations are key in this regard. the second false contradiction opposes public and private players, with the former supposedly conscribed in their conservative regulators ’ role and the latter in their innovators ’ role. after decades of developing and maintaining state - ofthe - art technologies, central banks may sometimes consider this caricature as unfair. to private players who know us better – and to others : you can rest assured that we are willing to continue our fruitful partnership. we will obviously have to reinvent the terms and conditions of that partnership to some degree, but let me stress that central banks ’ action will only succeed together with you, not against you. and that we central banks need to