andreas dombret : statement at the workshop on " digital finance regulatory challenges " statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the g20 conference " digitising finance, financial inclusion and financial literacy ", wiesbaden, 26 january 2017. * * * mr von weizsacker, ladies and gentlemen, for a first approach when talking about regulatory challenges in the age if digitalisation in finance, i would like to consider three aspects of financial technology and regulation : first, i perceive no general need for separate regulation ; to me it seems even detrimental to treat comparable businesses with equal risks in a different way, second, regulators have to stand ready to propose solutions for emerging risks. we should initially concentrate on the basics, such as setting the right incentives, but – beyond that – should refrain from regulating “ theoretical risks ". we should closely monitor fintech evolution to be able to act swiftly, once risks become relevant in practice, third, international exchange about experience with fintechs is very fertile to set the right course for future regulation from the outset. the way we perceive financial technology has transformed over the last years. when the buzzword “ fintech ” emerged a few years ago, everybody was excited : is there a better way ahead for doing finance – maybe even without banks? i also remember regulators in a state of anxiety : is traditional financial regulation unsuitable for high - tech financial innovations? today and up to now, we have a far more relaxed view about business disruption and regulatory challenges. in germany, fintechs have not forced us to overhaul existing financial regulation or to consider a new framework. the reason for this lies in the setup of german financial regulation : the rules apply to specific business models and their associated risks – technology is, by and large, treated neutrally. this becomes apparent in our financial services landscape. some digital innovators that actually accept deposits or lend money need to be licensed as credit institutions. for some other business models, the rules for financial services institutions apply. other innovative businesses remain unregulated, but this is for a good reason : they are non - financial in character and only provide auxiliary services complementary to financial services. by treating financial innovations equally under the regulatory framework, german regulators follow the maxim of “ same business, same risk, same rules ". but the important strategic question is : does this principle offer enough orientation for the future – given that no one knows how financial innovations

geopolitical developments often have a major impact on oil prices – since they can affect oil supply directly and since the threat of future supply disruptions can also build a risk premium into oil prices. as a notable example, in the early part of 2014, conflicts in libya and iraq led to temporary outages in their oil production, keeping world prices high, even as supply elsewhere in the world continued to ramp up. when production from those two countries came back on stream, that was an important trigger for the plunge in oil prices later in the year. of course, such conflict situations and other geopolitical events can change very quickly in one direction or the other, and continue to pose an important source of risk. second, the organization of the petroleum exporting countries ( opec ) has had an important influence on the dynamics of world oil markets, and this influence may be changing over time. the drop in oil prices was accelerated in early december by opec ’ s decision to leave its production target unchanged, even as prices were falling. in effect, opec members were allowing the price to fluctuate so that more supply adjustment would come from other producers, rather than acting as the “ swing producers ” as they had in some other episodes. this changing role may reflect, in part, the decline in opec ’ s share of world production – which, at about 40 per cent, is 10 percentage points lower than in its heyday ( chart 12 ). it is too early to tell whether and how opec ’ s behaviour will change as its market share continues to decline. third, financial linkages. with the run - up in commodity prices during the past couple of decades, much attention was paid to the “ financialization ” of commodities – including investor flows into commodity - based mutual funds and exchange - traded funds, increased involvement by global investment banks in commodity - backed lending and physical commodity trading, and the prominent role of large commodity - trading houses. 5 financialization has gone into reverse in recent years, owing to a combination of moderating trends in commodity prices and regulatory changes. the research we have done at the bank c. baumeister, “ the art and science of forecasting the real price of oil, ” bank of canada review ( spring 2014 ) : 21 – 31. t. lane, “ financing commodities markets, ” ( speech to the cfa society of calgary, calgary, alberta, 25 september 2012 ). bis central bankers ’ speeches of canada on the role