social benefits that are quite “ competitive ” – so to speak. thirdly, we should value the positive effects of international standards. they may help to maintain a level playing field and to prevent a regulatory race to the bottom in policy fields that serve the whole of society. therefore, i do not entirely follow rodrik ’ s reasoning. still, what i see as his most important message is that we should not artificially separate international economics from national or regional politics. 4. outlook ladies and gentlemen with regard to the complex challenges facing the euro area, i have certainly not presented you with a solution that mr mencken would have regarded as simple, clear and wrong. instead, i have tried to show why solutions to these challenges have not yet been found. let me highlight two key messages. 1. regarding the two challenges that i have discussed, their complexity results from interactions between the economic and the political sphere. solutions cannot be found merely by treating the symptoms ; instead, we need to tackle the underlying causes. for academics and policy makers alike, it remains imperative to continue to study these interactions and further our understanding of them. in doing so, we should not ignore issues of inequality. 2. faced with complex problems, we can achieve a lot by correcting erroneous beliefs. our reality is complex, so we should not attempt to present it in an oversimplified manner. politicians and other experts are thus reminded of their responsibility to inform the public, especially on matters that are complicated. 4 / 5 bis central bankers'speeches these are all reasons not to question the entire project at sight of simplistic alternatives. instead, we need to search for convincing, long - term solutions. thank you. 1 source : penn world tables version 8. 1. 2 source : milanovic, b. ( 2013 ). global income inequality in numbers : in history and now. global policy, 4 ( 2 ), 198 – 208. 3 on domestic distributional consequences of international trade, see e. g. acemoglu et al. ( 2016 ). import competition and the great us employment sag of the 2000s. journal of labor economics 34 ( s1 ) : 141 – 198 ; mckinsey ( 2016 ), poorer than their parents? a new perspective on income inequality. available online : www. mckinsey. com / global - themes / employment - and - growth / poorer - than - their - parents - a - new - perspective - onincome

and emerging risks may develop in the future? at the bundesbank, we have identified some potentially risky fintech activities that may warrant different regulation at a later stage. for example, various business models have not yet been tested in a downturn. and we cannot predict which of these start - ups is going to evolve into a major player that may end up even becoming too big to fail or too interconnected to fail some time. but rules that target a mere theoretical risk might result in overregulation. on the other hand : if we wait too long for financial innovations to settle, risks could increase and adjustments to the 1 / 2 bis central bankers'speeches existing regime will be more difficult, as vested interests become increasingly powerful. to strike the right balance, a general approach could be to initially concentrate on two aspects : one, setting the right incentives through regulation and two, monitoring fintech evolution closely. uncertainty about regulation is surely a common ground for all of us. exchanging knowledge and experiences should be to our mutual benefit. some may raise the different circumstances in our countries as an obstacle. it is true that digitisation has not spread with the same speed across the globe. also, regulations differ. my response is that we need this exchange precisely because of our divergent experiences. given that digital innovations may be “ black boxes ", learning from each other might help to contain threats from the outset. that way, regulation will not lag one step behind financial innovation. best practices could be a valuable output. 2 / 2 bis central bankers'speeches