funds and eligible liabilities in the event of resolution. the application of this directive poses a number of challenges, in particular in terms of the transition towards compliance with these new requirements by banks, which i shall refer to later when discussing spanish banks. also, as the imf has recently indicated, it would be desirable to assess the suitability of bail - in strategies in the event of systemic crises, given their potentially adverse effects on the financial system as a whole, which may ultimately raise social losses and the cost to the taxpayer. in order to make further progress in reducing the risk of financial fragmentation within the euro area, it is necessary to boost private - sector risk - sharing channels, such as the credit and capital market channels, so that they work alongside the public - sector risk - sharing mechanisms. this requires, first, removing obstacles to the creation in the medium term of genuine pan - european retail banks. in particular, a single deposit insurance fund needs to be created, the euro area needs to be treated as a single jurisdiction for regulatory purposes and, above all, market pressure needs to reach broad segments of the european banking system, such as public - sector banks, cooperative banks and savings banks. second, progress needs to be made on the various capital markets union initiatives. the implementation of this project should lead to more efficient and integrated capital markets, enabling european businesses to diversify and broaden their sources of funding and to reduce their excessive dependence on bank finance. however, this is a complex objective that requires action on various fronts, including the development of market infrastructures, the review and harmonisation of market regulation and supervision and of insolvency procedures, and the elimination of the bias in favour of debt financing in some countries ’ tax systems. it is also necessary to move towards a fiscal governance framework that allows the stabilising capacity of fiscal policy in the euro area in times of crisis to be increased. for this purpose, countries should take advantage of the current upswing to generate scope for stabilisation in future crises, since national fiscal policy will continue to be the first line of defence. 8 / 14 in fact, a fiscal union, with shared responsibility for macro - financial risks that are already subject to common supervision, besides improving incentives would be conducive to the sustainability of public finances and macroeconomic stability in the area. however, clear, strict fiscal rules are also necessary for the member states. simplification of the complex web of rules and procedures that currently make

- million - in - losses - reported page 5 of 9 new risks be both honest and realistic. and while innovators put forth the benefits of their innovations, let ’ s engage in a truthful and sober reflection on the familiar and new threats being introduced. trials by central banks my third observation is that central banks are not immune to the impact of fintech. our role as operator or provider of particular services, as well as how we conduct our supervisory roles, will be affected by the advancement of exponential technologies. on the provision of services, such as a platform for high - value payments typically processed through a real - time gross settlement system, we have seen waves of experimentation by central banks. projects such as jasper in canada, ubin in singapore, and our own project khokha have been initiated to understand the impact of new technologies on such service provision. some of these projects are in their third phase, trialling securities and cross - border payments on a blockchain. other central banks, such as the swedish riksbank and the bank of uruguay, have already experimented with cbdcs, or are considering a more retail - focused or general - purpose cbdc. of course, as each of these central banks has noted, the issues are much broader than just technological considerations. the policy considerations are weighty. as the bis has indicated, careful consideration needs to be given to the impact on financial intermediation and financial stability, and to the unintended consequences of such solutions. to stay on the front foot, so to speak, the sarb is considering hosting a focused workshop on cbdcs in the coming year. we aim to attract the world ’ s leading thinkers on the topic to inform our own policy thinking on cbdcs. also, several stakeholders are enquiring about project khokha ’ s phase 2, and many have submitted suggestions. we are giving careful consideration to all of this, and hope to make a definitive announcement early next year. page 6 of 9 conclusion : the fintech potential going forward ( digitally ) to conclude, i ’ d like to share a few thoughts on the potential of fintech, looking forward. the emergence of fintech, the fourth industrial revolution and the continuing shift from an industrial to a digital economy affords us, as a country, the opportunity to leverage these innovations towards lifting the growth potential of our economy. there are anecdotal estimates that such efforts could contribute 0. 5 - 1. 5