, this contribution has taken the form so far of putting among our supervisory priorities, within our mandate of keeping the banking system safe and sound, and beyond the strengthening of banks'resilience to immediate macro and geopolitical shocks, and of the strengthening of their management of climate and environmental risks, that banks make further progress in their digital transformation. the objective here is to ensure that they address herewith the risk digitalization create on the sustainability of their business model and their profitability. 2. should we go beyond? for instance some recent industry proposals call for a broader mandate of the eu supervisory and regulatory authorities to include the 2 / 3 bis - central bankers'speeches 2. goal of competitiveness of the eu financial sector. i am not sure that for us, supervisors, this would be appropriate as i believe that the supervisor's essential mission should remain to contribute to ensure financial stability as i see it as a necessary pre - condition to any sustainable competitiveness. it might be different for regulators but when i consider for instance the outcome of the negotiations on the banking regulation package, which preserves overall alignment with basel 3 while taking into account european specificities with the phase - in of the output floor, or the possibility to adopt a delegated act to postpone or adjust the market risk reform, should other major jurisdictions fail to deliver on their own implementation, i see that in practice the issue of competitiveness is already taken on board. this is the reason why in 2020, the banque de france launched a large - scale experimentation program on wholesale cbdc with a number of market participants. this program has allowed us to understand better how dlts work and the benefits that are likely to emerge for financial markets. our main motivation is to extend the existing trust in our settlement infrastructure and assets to transactions carried out on dlts. their settlement in central bank money appears essential to guarantee the players in these markets against the counterparty risks inherent with other, private tokenised settlement assets. the new european dlt pilot regime, which will come into force in march this year, will allow us to continue our experiments within the boundaries of a simplified regulatory framework. at the same time, the banque de france is contributing to the reflection on the possibility of a retail cbdc : this is currently what eurosystem central banks have embarked on, under the ecb aegis, with the ongoing investigation phase for a digital euro. the evolution of the payment landscape leads us to reflect on the ways in which

this job. strangely enough, it comes from both sides of the debate : • those arguing for looser regulation often claim that prudential regulators have a technocratic focus on eliminating all risk, and fail to see the bigger picture. worse yet, we are sometimes accused of having infected the wider financial sector with a culture of ‘ safetyism ’ as a result, damaging investment and growth. • on the other hand, those arguing for tougher standards often seem to suggest that any crystallised risk – and in particular any failure of a regulated firm – represents a failure of prudential regulation. in response, i would make a number of points. first, if we have really been trying to reduce risks to zero, then we have unambiguously failed. consider these simple points : we run a banking system which is leveraged to a bank of england level of around 20 times ; we have managed the demise of over 20 banks since the pra was created, some very dramatic such as silicon valley bank uk, others managed quietly ; at the same time we have authorised another 38 banks and 28 insurers ; 15 and according to the imf we are the world ’ s largest host jurisdiction to foreign financial firms, not least given the large number of international bank branches we welcome. 16 but more importantly, it is absolutely not the job of prudential regulators to reduce risks to zero. we may have no appetite for causing a financial crisis. but that doesn ’ t mean we have no appetite for risk. risk is the lifeblood of a thriving capitalist economy, fuelling growth and innovation. the whole point of having a strong financial system is to enable society to take risks : by providing capital to promising ( but uncertain ) opportunities, and allowing business and households to pool their risks via insurance and hedging products. 17 our role as regulators is not to eliminate risk, but to ensure risks are properly managed, so that individual failures will not bring down the whole system. a mature debate on prudential regulation needs to recognise this basic fact – though of course people can and do differ on what good risk management looks like. as for “ safetyism ”, i recognise that there is a broader debate to be had about risk appetite in society, and whether we can rely more on caveat emptor especially in wholesale markets. but honestly if parliament puts the word “ safety ” into our primary objectives, then you should expect us to be proud growth - oriented safetyists! the