clear and settle all types of transactions among themselves. some central banks have been working on similar systems collaborating with private banks. the ubin project is continuing in singapore whereas, last may, the bank of canada concluded that its own jasper project showed that the technology was not sufficiently mature. in some countries, the use of cash, notes and coins is declining at fast rates and we cannot disregard its possible disappearance in the future. in most jurisdictions however, that possibility is very far away, if it ever occurs. in the euro area, issuance of bank notes has more than tripled since 2001 and is still growing at about 5 % a year. all the developments i mentioned would not materially change the nature of our financial system, the concept of money or the effectiveness of central banks ’ monetary policy. the so - called private “ crypto - currencies ” can never prevail as general money substitutes. their designation is a misnomer as they are not a currency but just a commodity used as a speculative asset and as a restricted medium of exchange in very special circumstances, comprising criminal activities or failed states with collapsed institutions. instead, the use of the blockchain by central banks to create digital currency open to all citizens without limits would be really disruptive. this would be a radical political choice that could end banking as we know it and is therefore unlikely to happen. ignoring that possibility and regarding current banking activity, fintech has penetrated mostly into payment systems. banks ’ payment - related income has decreased but some is retained as bank accounts are still the ultimate way of settling. where fintech can have a big impact is in cross - border payments by using the blockchain technology to eliminate several intermediate steps, speed up global transfers and promote worldwide financial inclusion. concerning credit, peer - to - peer ( p2p ) or crowdfunding, fintech lending is still very small in general, with the exception of the u. s. where mortgage origination is significant, even if the online firms do not keep the exposures in their small balance sheets. 16 this progress is naturally due to the fact that fintech firms are much less regulated than traditional institutions under the presumption that it is good to allow new competition. the hope of fintech enthusiasts is that its spread will lead to much lighter financial regulation. however, new technologies generate new risks and do not eliminate the old ones which provide the rationale for financial regulation in the first place. asymmetries of

to allow mortgage abs to be used for repos and the 2005 legal amendment excluding repos from bankruptcy processes led to the increase of the repo market. similar changes took place at the same time in europe. 35 as stated in perotti ( 2010 ) “ these privileges were granted to overnight secured credit and derivatives, and essentially allowed these lenders to ‘ front run ’ all other investors in case of default. this made such lending safer for the lenders, and thus cheap for the borrowers. the result was fantastic growth of unstable funding to the detriment of stability ”. we know what happened in the crisis, once again proving the statement by douglas diamond : “ financial crises are everywhere and always about short - term debt ”. 36 the crisis itself made securitisations and repos shrink significantly. in the u. s., broker - dealers changed into banks, making the shadow banking sector smaller. post - reform, securitisations became less attractive being now subject to higher capital charges, securities vehicles were consolidated with bank sponsors and repos and otc derivatives have become subject to central clearing. the overall progress in reducing risk in stfs and derivative markets has been significant, but might not be sufficient. very little has been done to prevent the expansion and misuse of those instruments in any future euphoric episode. the recent recommendations by the fsb are in my view not sufficiently far - reaching regarding the re - hypothecation and re - use of securities in repos. 37 regarding the use of margins and haircuts, the fsb recommendations to introduce minimum initial levels are also quite narrow : they exclude sovereign paper and transactions between regulated institutions and apply only to non - centrally cleared operations. going forward, more may have to be done. in regulatory circles, the potential for setting margins and haircuts as a policy tool to address systemic risks in derivatives and sft markets was already identified shortly after the global financial crisis. indeed, the bis committee on the global financial system ( cgfs ) concluded, already in 2009, that margining practices in otc derivatives and haircut - setting in sfts are a source of procyclicality in the financial system, and recommended enhancements to these practices in order to dampen the build - up of leverage in good times and soften the system - wide effects in bad times. 38 furthermore, the cgfs encouraged macroprudential authorities to consider measures that involve countercycl