hamper innovation and progress, maybe even of humanity, if you will. bigtech companies can ’ t be properly regulated at the national level. google and amazon are perfect examples of this ; and the issue only becomes more complicated when bigtech companies enter the arena of financial services. the regulatory issues associated with diem serve as just one example. regulators across the globe are struggling to get a grip on bigtech companies – be it in the eu, the united states, australia or even china. 2. cross - border regulation of digital innovation is in its infancy, but a start has been made. harmonisation within the eu is a good example. take the general data protection requirements, or gdpr – whether or not you are a fan – or the eu ’ s new digital operational resilience act ( dora ) – a legislative initiative which also addresses material ict third party risks for banks. 3 / 4 bis central bankers'speeches for the libra association ’ s diem project, the swiss regulator finma set up a college of supervisors from all over the globe. this is a good example of international cooperation in regulating digital innovation. 3. getting a grip on the risks of digital innovation will be difficult and complex. it will take continuous work and international cooperation. in tech, the big issue is of course : can regulation ever keep pace with digital innovation? we can see that legislators are trying to accompany the digital transformation in a forwardlooking manner, by providing legal certainty for innovative developments and by appropriately addressing risks. to do this, it is necessary to keep abreast of current developments, to actively seek out dialogue, and to accept that regulation has to evolve regularly. regulators need to be agile and proactive in order to swiftly implement the lessons learned from crises. that is true at a national and international level. that is no easy task for international cooperation, i am afraid. harmonisation should be our common goal. perhaps even a g7 or g20 mandated body could be an option to establish such standards and risk management ; we could call it a “ digital bcbs ”. 5 closing remarks ladies and gentlemen, let me recap the “ journey ” of my short presentation : first, international standard - setting by the bcbs works and is quite successful, but it is a marathon, not a sprint. second, international regulation brings a lot of benefits for supervised entities, supervisors and the financial system as a whole. but it also has its downsides. third, global

entities, the basel minimum standards create a reasonably level playing field between all competitors worldwide. because they are implemented differently from one country to the next, the playing field might not be perceived as being fully level. but it is at least much more even than it would be without the bcbs. arbitrage is significantly supressed. a second benefit is that for entities operating internationally, the rules are more consistent across the countries in which they conduct business. thus, the rules are more easily understood and implemented. 2 / 4 bis central bankers'speeches for supervisors, the benefits are quite obvious. by working together, we help establish good regulation. the basel standards are drafted by experts from all around the globe. if every member state were to start designing their own regulation from scratch, i am sure that basically none of them would match the quality of the committee ’ s work. and what is good for supervisors is also good for the financial system as a whole. safeguarding financial stability is not something we can do at the national level alone if the entities we supervise are acting internationally. but i do not want to play down the downsides. international standards follow a one - size - fits - all approach. some rules are not fit for purpose in every jurisdiction. national specificities may not be addressed. the standards are intended for banks that operate internationally. in germany, however, small and medium - sized banks make up more than two - thirds of the market share, and these banks are not the target of these standards. the large volume of bank loans as a ratio of funding via capital markets makes the impact of the standards on the financial economy much bigger. and the widespread use of internal models for risk calculation is seen as a circumvention of the standards. 4 a way forward for global standards for digital innovation having spoken about the fundamentals of international cooperation in banking regulation, i would now like to widen my focus. as you are digital experts, i am very much interested in your views on the standardisation of regulation of digital innovation. in banking, just like in many other industries, we see a lot of benefits stemming from new technologies. let me make three points in this regard : 1. there is a clear case for international digital innovation standards. digital innovation is global by nature. regulatory arbitrage is a common feature in the world of today. digital innovation needs scaling up. otherwise, the huge investments will not pay off. divergence in the legal environment is costly and could ultimately