to enable the financial system to absorb the failure of individual firms as others grow and prosper ; and ( d ) we are strengthening international cooperation arrangements necessary to be able to effectively regulate in a digital environment that may have little regard for national borders or jurisdictional reach. disruptive innovation and the global unbundling of traditional financial services models in banking, insurance, and funds management can also have implications for financial stability. international consolidation in the financial services market to maximise the scalability benefits of new technologies may create larger firms that are more difficult to resolve. greater specialisation may also foster the growth of mono - line firms that are more exposed to sectoral shocks. it is also important to assess the implications of new types of settlement systems and digital currencies for the role of central banks in the domestic and international monetary systems, including the pros and cons of digital base monies supplied by central banks. 10 conclusions in summary, the dual forces of globalisation and innovation are high on the research and policy agendas for financial regulators and central bankers. an immediate challenge relates to the postbrexit reconfiguration of the european financial sector. in managing the transition to the new post - brexit regime, it is essential for policymakers to take a global perspective in view of the importance of non - european investors and financial intermediaries to the functioning of the european financial system. equally, financial innovators will be looking for clarity about the new regulatory and trading arrangements between the uk and the eu, since uncertainty about institutional frameworks is an obvious inhibitor of investment plans. let me conclude by thanking the organisers of the european financial forum. the agenda and lineup of speakers for the rest of today looks fascinating. 1 philip r. lane ( 2011 ), “ innovation and financial globalisation, ” in lessons from east asia and the global financial crisis : annual world bank conference on development economics global ( justin yifu lin and boris pleskovic, editors ), 309 - 332. 2 philip r. lane and gian maria milesi - ferretti ( 2016 ), “ international financial integrationin the aftermath of the global financial crisis ”, presentation, imf annual research conference. 3 philip r. lane ( 2014 ), “ cross - border financial linkages : identifying and measuring vulnerabilities, ” cepr policy insight no. 77. 4 daniel carvalho and michael fidora ( 2015 ), “ capital inflows and euro area long

a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase programme in terms of size and / or duration. ” more generally, the high degree of interconnectedness across currency areas makes it imperative that central banks actively cooperate in the sharing of information and analysis, so that monetary policy decisions are based on a shared understanding of current macro - financial conditions. 6 especially in view of ireland ’ s status as an international financial centre, the central bank of ireland is committed to playing its part in the analysis of international financial linkages. this includes publishing research on the characteristics of the irish investment funds sector, which predominantly consists of intermediation structures that link foreign investors and foreign issuers. 7 it also includes giving due attention to global financial conditions in our assessment of risks to domestic financial stability. to this end, the bank is allocating increased resources to the monitoring and analysis of global financial conditions, as part of our new financial stability directorate that is being established this year to consolidate and reinforce the bank ’ s multifaceted work on financial stability. 8 disruptive innovation technological innovation is a second force driving structural changes in the international financial system. in particular, disruptive types of innovation that create new markets and products and carve out new categories of customers are especially powerful, relative to incremental forms of innovation that just seek to improve the quality or lower the cost of existing financial products. 9 it is possible that segments of the financial sector could be arriving at a tipping point in terms of the impact of disruptive innovation. while it would be unwise to offer strong predictions as to the ultimate impact of any specific innovation, regulators and central bankers must be sufficiently 2 / 4 bis central bankers'speeches prepared to respond appropriately to a shifting financial services landscape. in our regulatory work, technological development in the financial services sector makes us more interested than ever in seeing evidence of prudent business management. strong governance, clear strategic planning and effective and embedded risk management are especially critical during phases of disruptive innovation. some of our key regulatory considerations include : ( a ) for authorisations, we need to strike the right balance between ensuring that firms seeking entry to the financial system meet our expectations, while at the same time being to open to innovation ; ( b ) for regulated firms, we are vigilant about shifting business models and emerging risks – including ensuring that prudential and consumer protection requirements are appropriate for new business models ; ( c ) our orderly resolution regimes are being adjusted