to the subprime market or to complex structured products in domestic financial systems has surely helped in this regard, but there are more structural reasons. in particular, there has been an important reduction of the financial vulnerabilities that were widespread in the past, and which led to costly crisis with important output losses and poverty increases, as the asian crises ten years ago crudely demonstrated. many emerging market economies have reduced their financing needs and improved their debt management. many more run current account surpluses which reduce their reliance on external funding. most have accumulated massive international reserves, well in excess of what would be needed for precautionary reasons. all in all, this paints a very different picture as compared to past episodes of global turbulence, when these economies used to be not only “ influenced ” by the ups and downs of the changing risk preferences in global financial markets, but simply “ driven ” – even “ drowned ” – by them, sometimes regardless of their economic fundamentals. in my view, this separation from the main stream of the turbulence constitutes an achievement in itself. from other stand point, it is certainly striking that in this period of global financial turbulence inflation is identified as the key economic challenge for emerging economies. indeed, the rise of inflationary pressures on food prices derived from the commodity boom, is becoming a very worrying concern. the large change in relative prices that underlies this prolonged boom is having a stronger impact on developing economies, with very negative and substantial effects on the well being of the poorest portions of their populations. therefore, as inflation creeps up the concern of policymakers deepens, not only in the sphere of macroeconomic stability, but beyond. in connection with this, the fact that monetary policies have remained focused on inflation stability in most emerging market economies is an additional novelty to mention in the context of the present turmoil. going a step forward, it is also noteworthy that emerging market economies, and in particular asia – with china at its centre – may become some kind of a “ spare engine ” to world growth, buffering the impact of the turbulence on global activity. this idea of a “ second pillar ” for growth relies mainly on the observed strength of domestic demand in asia, and the key issue here is whether this strength could be self - sustaining. maybe, we will not be able to answer this question thoroughly until the macroeconomic impact of the turbulence unfolds completely and the trade channel works itself out. but, one aspect that is clear – even now

bitcoin, this became clear to a wider audience when the huge electricity costs went public. also, there is no free lunch. there are trade - offs like the one that concerns convenience versus security. in germany, for example, various smartphone payment apps were hacked because the two - factor authentication principle was considered too inconvenient for fast - moving customers. so even if anything is possible in a digital world, there are still costs and trade - offs involved. digital natives have to learn to accept those limits and trade - offs. they need to learn not to be blinded by theoretical ideas and mere digital ideology. proof of work is what counts in the end. 5. why digital natives may themselves be prone to fallacies and there is a second observation about digital natives colonising the financial sector. they are prone to both misconceiving and underestimating the existing financial system. let me address the issue of misconceptions. lately, amidst the widespread media attention paid to bitcoin and other crypto currencies, there has been a great deal of confusion about what exactly crypto currencies are. as a central banker following the news, it ’ s easy for me to see that part of the puzzle is the fact that conventional money systems aren ’ t widely understood to begin with. but if people cannot elaborate on the difference between different kinds of currencies and other financial instruments, digital innovations can even become dangerous. this brings me to my most important point. however convenient and innovative digital evolution in the financial sector will be – financial institutions, as defined by the law, continue to play an eminent role for society. customers entrust banks with their savings, firms need financial services they can rely on, the economy at large requires credit. being part of the backbone of the 4 / 6 bis central bankers'speeches broader economy, banks need to ensure a reliable, trustworthy and sustainable flow of financial services. so banks are indeed still special in a way. and this is why they also still require special treatment in the digital age. for example, banks in germany can outsource it services and infrastructure, but they cannot shrug off their accountability towards customers in any way. so if a credit institution wants to move contents to an external cloud provider, it has to demonstrate that it is still able to manage all the risks involved in its services. thus, those who claim that the end of banks is near will face the following comeback : banks are still special,