we should not be blinded by the catchy terminology and the innovative technologies applied, but instead look for the concrete business models. regulating financial business in a digital era has become a topic that engages entire continents – and rightly so. because, simply speaking, if you create a superior algorithm once, you can distribute it across the globe and scale its use at virtually no cost. and like good business ideas, there are various threats out there that may transgress borders all too easily. that is why i ’ m convinced that we will benefit greatly from cross - border exchange in these matters. today, we are already exchanging experiences and views on regulating and supervising financial technology in several international bodies, for example in the basel committee. i am certain that these interactions will intensify in the months and years ahead. it ’ s true that some countries are more reluctant than others to embrace digital finance. and interpretations of an acceptable scope in promoting innovation differ across jurisdictions. but as with the basel minimum standards for banks, we need to take the long - term perspective when assessing the reason for rules for the digital financial sector. because with digital innovations, as with the traditional risks of banking, we all have to unite in ensuring that digital innovation now will not be the origin of the next crisis. this should motivate us even more to keep in touch. thank you very much for your attention. 4 / 4 bis central bankers'speeches

kevin m warsh : financial market turmoil and the federal reserve – the plot thickens speech by mr kevin m warsh, member of the board of governors of the us federal reserve system, at the new york university school of law global economic policy forum, new york, 14 april 2008. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system ’ s website. * * * what's past is prologue ; what to come, in yours and my discharge. shakespeare, the tempest, act 2, scene 1 thank you to the new york university school of law for inviting me to participate in today's global economic policy forum. 1 prologue a little more than a year ago, i began to recount a story – already long - in - the - making – of the transformation of financial institutions driven by abundant liquidity in global financial markets. 2 in those early chapters, one could not help but worry about the inherent risks to financial markets and the economy when the gloss of confidence wears thin, causing me to wonder aloud : " what happens when liquidity falters? " 3 let me briefly try to recount this tale over the last few quarters before offering some rough plot lines from which the balance of the story can be divined. the sleepy complacency of a bygone era seemed rudely interrupted by a liquidity shock last august. 4 a global margin call on virtually all leveraged positions began. as you know, the federal reserve found it necessary to begin to exercise its monetary muscles in unprecedented ways. the seasons darkened, and the plot thickened. new structured products and old financial institutions evidenced increasing signs of weakness. some central banks, including the federal reserve, helped supply liquidity to where it was most in need. financial market turmoil, partly as a result, was periodically placed in abeyance. casualties of the liquidity contraction nonetheless appeared ; some remained in the narrative for awhile, others were removed with great dispatch. the narrative continued to morph through the first quarter of 2008. central banks, while generally more comfortable remaining behind the scenes, took center stage with new tools and policy prescriptions. the script was rewritten so that product innovation flowed, but this time from the public authorities. many private market participants receded to the shadows of the stage, some anxiously anticipating intermission. the opinions i express are my own and do not necessarily correspond with those of my colleagues in the federal reserve system