. we want to be more open about our assessment, but great care has to be taken to avoid a situation where revelations about emerging concerns lead to acceleration of those concerns and becomes a self - fulfilling prophecy. as i look forward and ponder the forces that are shaping the evolution of the global financial system, the fsb is currently grappling with two issues — financial innovation and market fragmentation — that have the potential to profoundly affect financial stability, so let me start there. owing to our forward - looking orientation, the fsb has been actively engaged in monitoring financial innovation for some time. starting a little over five years ago, there was an explosion of 4 / 6 bis central bankers'speeches financial innovation that had a technological component, which we now call fintech. this encompasses peer - to - peer lending, cryptocurrencies like bitcoin, and the use of new techniques like artificial intelligence and machine learning. in 2017, the fsb issued a report on the implications of fintech for financial stability. the report was careful to note the potential benefits of many of these innovations, including the possibility of greater financial inclusion and increased speed of financial transactions. however, the report also drew attention to several supervisory and regulatory issues, including three priorities where international collaboration is critical : managing operational risk from third - party service providers, mitigating cyber risks, and monitoring macrofinancial risks that could emerge as fintech activities increase. 1 more recently, one particular area of fintech has received a lot of attention — stablecoins. these are a type of crypto - asset that attempts to address the volatility of some crypto - assets by tying their value to conventional assets, such as the value of the u. s. dollar or a basket of currencies. while it hasn ’ t been created yet, it is facebook ’ s proposal for a new stablecoin that significantly increased the public ’ s attention to stablecoins. at the fsb, we undertake regular monitoring of the financial stability implications of crypto - assets, and we have had discussions about the regulatory and supervisory approaches to crypto - assets and potential gaps in regulation. the introduction of stablecoins, however, brings a potentially new scale and scope that the financial regulatory community must carefully consider. although there is a small risk to financial stability today, there is no doubt the potential scale of stablecoins and other crypto - assets yet to emerge may pose regulatory challenges. at present, the

to end it, this year the fsb kicked off an evaluation of the effects of the reforms that have been put in place around the world to deal with the issue. by next year, i hope we will be able to discuss the results of that work. nonbank financial intermediation during the crisis, “ shadow banking ” became the term for any type of financial activity that occurred outside banks that resembled what banks did and that often wasn ’ t completely understood. within the fsb, we refer to those activities as nonbank financial intermediation, or nbfi. regardless of its name, a lot of blame for the problems that arose in the global financial crisis centered on risks that emerged from some activities in parts of this sector, and one of the fsb ’ s first jobs was to try to look into these activities to better understand their growing role in financial markets. among the important steps we took was a global monitoring exercise that results in an annual report on the size of nbfi in the global economy. that work actually goes beyond the membership of the fsb, since a number of important international financial centers also report information to us. with all of that information, we are able to track the overall size of nonbank financial intermediation, which in 2017 grew to $ 184 trillion, representing nearly half of financial activity in 21 countries plus the euro area. more important, we are now able to more carefully categorize activities in the nonbank sector in order to analyze potential vulnerabilities. 3 / 6 bis central bankers'speeches in addition to monitoring, we have made a number of other recommendations and are working with fellow global standard setters to implement them. for example, we are working with the international association of insurance supervisors on capital standards for global insurers, and we are working with the international organization of securities commissions ( iosco ) on liquidity and leverage in the funds industry. the funds sector continues to evolve, so we will focus particular attention here as we move forward. status of post - crisis reform the result of 10 years of policy development by the fsb and implementation at the national level has been a stronger, more resilient global financial system. large banks are better capitalized, less levered, and more liquid. too - big - to - fail reforms are well - advanced, particularly with the formation of effective resolution regimes for banks. otc derivatives markets are simpler and more transparent. nonbank financial intermediation risks are