“ revolution ”, one thing is clear. central banks cannot fix economies by themselves. governments need to act too from the fiscal side, and monetary and fiscal policies have to act in harmony. on top of this, governance needs to improve to inspire the trust and confidence of consumers and investors. 21. the crisis is still with us ; and the revolution in monetary policy is still work in progress. but it has thrown up a number of questions. how will this revolution play out? what will it mean for the mandates of central banks and the autonomy with which they will deliver on that mandate? who will win and who will lose? and, to sum it all up, what are the lessons from this “ revolution ” for monetary policy? for answers to these weighty questions, who better to turn to than professor joseph stiglitz. 22. ladies and gentlemen, please join me in welcoming professor joseph stiglitz to deliver the c. d. deshmukh memorial lecture on : “ a revolution in monetary policy : lessons in the wake of the global financial crisis ”. bis central bankers ’ speeches

is the supervised institutions that bear full responsibility for any risks arising from cooperation with an external service provider. examples of such risks are a potential default by the external service provider, or the possibility of reputational risk. the institutions must ensure that the risks remain manageable – for instance, by including relevant terms and conditions to this effect in cooperation agreements and by considering from the outset how they can keep their business up and running if the partnership is terminated unexpectedly. so this sums up the conditions de jure. but are they always appropriate to the economic conditions? depending on the individual case, the picture can be very different. where credit institutions work with large technology firms, such firms ’ negotiating power might be so large, for instance, that institutions have difficulty effectively imposing their conditions on their contracting partners for the service being provided. you might call this “ the tail wagging the dog ”. 4 / 6 bis central bankers'speeches we also have to make sure that it does not make sense to outsource certain tasks simply because you can afford to be more relaxed about dealing with the resulting risks outside the regulated enterprise. the more the boundaries between sectors are blurred and the more intensively banks work with non - licensed enterprises, the more relevant discussions like this will become. my personal view is that we should discuss to what extent we might take a closer look at supervising individual activities – activity - based supervision – in addition to entity - based supervision. i am thinking here, for instance, about services provided by insourcers of a certain size and importance, such as cloud service providers. however, this would have significant repercussions – not least for supervisors. so that ’ s why it ’ s crucial that the debate does not take place in a vacuum, but always with a view to what is necessary and essential in order to tackle the key risks effectively. we are still in the early stages of this debate. in any case, the entity - based supervisory approach should remain unaffected. we cannot start to define areas where an institution is relieved of its responsibility for risks that ultimately affect its own services. this would pose a problem not just from the point of view of effective supervision, but also in regulatory terms. i also see a european dimension here. europe is already pressing ahead with regulation for issues emerging as a result of digitalisation. i am thinking, for example, of the eba ’ s recently issued guidelines on outsourcing arrangements. the bundesbank and bafin helped to draft these