sabine lautenschlager : harmonisation paves the way for a european banking market statement by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the single supervisory mechanism, at the federal financial supervisory authority 15th anniversary event, bonn, 28 june 2017. * * * there are two questions on the future of european regulation that we have to answer. first, will regulation continue to be shaped by global standards? second, how “ european ” must regulation in europe be? regarding the first question, i am still a firm supporter of global regulation. the financial crisis of 2008 showed us the interconnections of the global banking system. if a bank fails, it can destabilise markets worldwide and nationally. the stability of the system can only be ensured by global rules, and that ’ s exactly what the basel committee is working on. so once the committee has concluded its work on basel iii this year, all the major financial markets should implement the new standards – in europe and elsewhere. and in that context i find the most recent proposals by the us department of the treasury worrying. it looks as if elements of the global reform might be postponed or not even implemented. this involves important areas such as the new rules on the trading book. in my view, purely national initiatives will not improve the stability of the financial system, quite the opposite. it is all the more important that the eu implements the basel standards. the rules should be harmonised as far as possible for europe ’ s banking market. and this brings us to the second question : how “ european ” must regulation in europe be? the single market is a key element of a united europe, and we also need a single european market for banks. this involves harmonising the rules for banks – wherever it makes sense. but we should not forget that the european banking sector is characterised by diversity, not least as a result of national specificities, because this diversity contributes to the stability of the financial system. what we need, then, is a balance between harmonisation and diversity. there are some areas that require greater harmonisation and other areas that require less. for example, small banks in the euro area need somewhat less harmonisation. taken in isolation, a small bank poses a limited risk to the financial system. it only becomes problematic if many small banks run into trouble at the same time, and for this eventuality we need sound institutional protection schemes

what i mentioned earlier, customers must be able to easily initiate an instant payment from an online shopping environment and the merchant must instantly receive confirmation that the payment has been executed. the revised payment services directive ( psd2 ) provides a stable legislative framework for such services and aims to foster innovation and competition in this field. the erpb, taking the revised psd2 and the close - to - final regulatory technical standards as a basis, has supported the industry in its endeavours to reach agreement on the necessary technical, operational and business elements to ensure the pan - european provision of innovative and competitive payment initiation services. this work is well under way and will be concluded by june this year. in parallel, the european commission has encouraged a group of market actors to evaluate application programming interface ( api ) technical specifications to ensure that they will meet market needs and will be fit for purpose when accessing customer accounts to initiate payments. security the psd2 provides many opportunities for innovative services, including, but not limited to, ecommerce payment solutions. such solutions require standardised access to accounts, but also security throughout the payment chain. the psd2 regulatory technical standards on strong customer authentication and common and secure communication strike a good balance between the needs of consumers, third - party providers and banks. they will probably not be applicable until september 2019 at the earliest. since the main provisions of the psd2 have been in effect since last month, i call on payment service providers to fulfil the requirements of the regulatory technical standards, even if they are not yet legally required to do so, during the transition period until these standards enter into force. it is in their own interests to do so, as this will guarantee the high security levels that are necessary to retain public trust in the payment system and payment services. instant payments versus virtual currencies smart, pan - european instant payment solutions meet the needs of end - users in the digital age, being fast and easy to use as well as safe and reliable. the sct inst scheme and the underlying market infrastructure are subject to eurosystem oversight, and settlement takes place in central bank money. by contrast, so - called virtual currency schemes such as bitcoin, which have been 2 / 3 bis central bankers'speeches touted by some as the payment method of the future, cannot achieve that. first, bitcoin is not a currency but simply a speculative digital asset. it tends to be processed inefficiently and