the form of new services and costs reduction. such a balance can only be reached through adequate and proportionate rules, based on the risk profile of the service provided and not on the nature or the legal status of the provider. this principle has guided european authorities in the review of the payment services directive, which will be thoroughly discussed during this afternoon ’ s session. on top of these regulatory changes, technological innovations reinforce the need for fruitful dialogue and cooperation between all parties concerned. at the french level for instance, this is the purpose of the “ fintech forum ” launched in july last year by the french prudential supervision and resolution authority, the acpr, in coordination with the french financial markets authority. the continuous dialogue between regulators, supervisors and companies will ensure that innovations are properly understood, that the necessary changes in regulation are identified in a timely manner and that information flows appropriately between stakeholders. we have also committed the banque de france and the acpr to a gradualist and proportionate approach in the regulation and supervision of fintechs. we think it is still more appropriate than a “ sandbox ”, which could create threshold effects. at the european level, cooperation between all stakeholders has been enhanced in the field of payments, so as to prevent market fragmentation. this is the central role assigned to the euro retail payments board. later on this morning, yves mersch will give us further insights into the work of the erpb. allow me now to conclude briefly by expressing again my gratitude to all the speakers, panellists and participants who are present today to share their thoughts on a wide variety of subjects of topical interest. i wish you extremely fruitful discussions throughout the whole day. thank you for your attention. 3 / 3 bis central bankers'speeches

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