the european continent ; they can pool their potential and work together as a single financial centre on the global market – not as a replica of the old systems, but in a new, forward - looking way. the new digital technologies provide a whole host of ways to overcome the geographical distance between individual locations. various ( financial ) locations can connect as if they were all in the same place, coming together to form an agglomeration. real - time communication, distributed leger technology, platforms and co - working are just a few ways of reducing the importance of physical distance. digital intermediation helps suppliers find customers, and vice versa. just as value chains of services can today be forged across continents, the innereuropean financial metropolises could work together. regional markets could be merged on a european financial platform to create a networked economy. with time, it may even be possible to develop or at least maintain strong and stable personal relationships online. the digital, decentralised market is definitely part of the future, and it is calling traditional financial centres into question. the european continent has an incredible opportunity to set up a technologically first - class, networked financial hub from scratch and to become a highly relevant global player. but what would this require? let me briefly address five relevant issues. first, specialisation and cooperation : the utmost challenge is for the financial centres in continental europe to limit their own range of services, to find a specialisation and – at the same time – to cooperate online with other financial centres despite all the other competitors. however, political competition among financial centres is likely to stand in the way of this approach of specialisation and cooperation. market - driven specialisation could help to create economies of scale and increase the potential for innovation which would, in turn, optimise cost structures and strengthen competitive positions. complementary cooperation could ensure the necessary range and quality of the financial services provided decentrally. the principle of cooperation also requires a culture of openness towards other international financial centres and players – which is a prerequisite for successful global competition. second, digital infrastructure : specialisation and cooperation require a digital infrastructure. the financial centres in continental europe need to be digitally networked in such a way that enables the agglomeration effects i mentioned earlier to be generated. for high frequency trading, a separate cable was installed in the atlantic to connect london and new york. nothing similar exists between paris and frankfurt. but we will not be on an equal footing with other

with regard to proportionality let's start with supervision. there is no doubt that sweeping reforms were necessary in the wake of the financial crisis. however, now that such far - reaching reforms have been implemented, we need to honestly ask ourselves the following questions. do they still make sense as a package? are the individual components of reform working together as a whole? precisely this process of reflection has been ongoing for several months now, and the bundesbank is playing an active role in these discussions. politicians and authorities have started to examine more closely the impact of and interaction between these individual components. assessing the proportionality of the rules with respect to smaller institutions is a focal point of this review. this issue is particularly close to my heart, which is why i would like to outline what i believe greater proportionality in banking regulation could look like. to do this, let's return briefly to our point of departure : complexity. what burdens are complex rules imposing on smaller institutions? the compliance burden is high for all institutions – regardless of their size. however, small institutions, owing to their smaller staff sizes, are less able to spread the costs of compliance across their employees and have to either hire additional staff or enlist external aid. this leads to relatively higher burdens. how might we change this? any expansion of proportionality must begin at the european level. that is why i endorse the proposal recently put forward by wolfgang schauble to review the relevant eu regulations with a view to achieving greater proportionality. this mainly applies to the crr and crd iv, 2 but also other legal regulations. that review will take place sometime in the next two years. so you see, it's worth talking about good ideas. these are two particular ways to give relief to smaller institutions. the first is a details - driven approach that involves introducing special exceptions or adjustments for individual rules. another, more radical approach would be to rewrite the rules from scratch, thereby establishing new legal bases that introduce relief for smaller institutions regarding some or all of the rules. it's worth noting here that the details - driven and the basic approaches are not in any way mutually exclusive. however – lest i wear out my welcome – i will confine my remarks to the basic approaches in three areas. one option would be to establish a set of eu - level rules which make greater allowances for proportionality while legislation and standards are still on the drawing board. additional proportionality clauses could, for