##udential requirements related to the interplay between banks and hedge funds. this could create the potential for an asymmetry leading to distorted regulatory incentives. second, also on the basis of the fsb analysis, we need to look with new eyes at the eu regulatory framework and ask ourselves whether it can properly address systemic risks stemming from shadow banking. in the past, regulation was sectoral - based, without specific consideration of the interconnections existing in reality between financial sectors. in this context, i welcome the commission ’ s green paper, which contains a very helpful preliminary analysis on whether the regulatory initiatives undertaken so far in europe are addressing such new perspective. it also indicates outstanding policy issues on which further regulatory initiatives might be needed. the green paper is also referring to the need for europe to establish a permanent process for the collection and exchange of information by all relevant authorities to address shadow banking entities and activities. in this regard, i note that the esrb, as the eu macroprudential body with authority over the whole eu financial sector, is well placed to conduct a continuous monitoring of systemic risks stemming from shadow banking. iii. policy issues concerning securities financing : the ecb ’ s views i would like now to focus on the repo market, which is of particular importance for central banks. the repo market is a key source of financing for the banking sector and the shadow banking system. most recent estimates of the size of the repo market in the us are in the range of usd 12 trillions in early 2010. 3 there are no official data on the overall size of the repo market in the euro area, but according to the latest december icma survey, the total value of outstanding repos on the book of the 64 offices of 59 financial groups in the eu in december 2011 was of eur 6. 2 trillion in gross terms. secured lending via repos has been increasing significantly in the past recent years in detriment of unsecured forms of interbank lending in money markets. indeed, we estimate that since 2002 the daily turnover of the interbank secured lending more than doubled whereas the unsecured part of that marked decreased slightly. secured financing provides benefits over unsecured lending, especially during turbulent market times. at the same time, however, the reliance on secured financing provides a powerful channel of transmission of shocks in the financial system. the decline in collateral values translates in additional collateral calls possibly compounded with higher haircuts and margins requirements. a

and when it gets up and running. in other words, the standards required to preserve safety against theft, fraud and operational failures may prove too demanding, or too costly, for many initiatives to get off the ground. this equilibrium would not imply a digital standstill, however. other initiatives can help meet growing consumer demand for payment services that work across borders and that are faster, cheaper and easier to use than current payment systems. libra has undoubtedly been a wake - up call for central banks to strengthen their efforts to improve existing payment systems. this by itself is undoubtedly a win - win situation for the global community. progress made by those central banks already operating at the technological frontier can be expected to increase the speed of technological diffusion across borders. europe is leading by example here. in november last year, for example, the eurosystem launched target instant payment settlement ( tips ) – a new market infrastructure which allows payment service providers to offer funds transfers to customers across europe in real time, around the clock, and on every day of the year. tips could be a role model for developing economies. it not only has the potential to help better prepare incumbents for the challenges arising from digital giants, it has also the potential to be a catalyst for financial inclusion, which should be a key objective of any public initiative in the payment field. central bank digital currencies a second, and related, equilibrium is what bank of england governor mark carney recently called a synthetic hegemonic currency that is provided through a network of central bank digital currencies – cbdcs for short. many central banks have been working on cbdcs in recent years, though at differing speeds, depending on differences in demand for cash by citizens, among others. sveriges riksbank and the central bank of uruguay, for example, are among the most advanced central banks in this area. their experiments with the “ e - krona ” and “ e - peso ” provide useful food for thought. the https : / / www. ecb. europa. eu / press / key / date / 2019 / html / ecb. sp190917 ~ 9b6... 18. 09. 2019 digital challenges to the international monetary and financial system page 5 of 8 people ’ s bank of china has also reportedly accelerated plans for its own digital currency in response to libra. the costs and benefits of issuing a global synthetic currency have been discussed since john maynard keynes ’ bancor proposal