have threatened financial stability have taken many different forms and affected many different sectors of the economy. often, the bubbles have occurred in response to some important innovation in the economy or the development of instruments that facilitated real estate lending to lowerquality borrowers. examples of these include the development of the internet in the technology stock boom of the late 1990s, and subprime lending and mortgage securitization innovations prior to the financial crisis. these innovations, in turn, sparked changes in belief systems that turned out to be false – such as, the rise in home prices reinforced the view that housing is an excellent investment and that national home prices can never decline. when the assumption that widely supports a boom is revealed as false, the consequence is often a sharp reversal in behavior and prices as the boom deflates quickly. i think it is very hard to anticipate these episodes and put rules in place that would limit such excesses. my concern is that we could over - engineer the financial system, building in complexity in response to potential risks that might, or might not, manifest themselves in the future. the complexity might not gain us much in terms of greater financial stability, either because the problem that ultimately manifested itself was different than we planned for, or because people found a way around the constraint that we had imposed on the system. there are also the challenges of appropriate calibration and timing. how much restraint should the rule exert as home prices rise or aggregate credit growth picks up? without historical experience and with an underdeveloped macroprudential framework, getting the calibration right is a difficult issue at this point. also, how quickly should the tool be unwound once it has done its work? the tool needs to work in a countercyclical way, but turning points are difficult to anticipate and which makes it challenging to get the leads and lags right. we have a very complex financial system in the united states. i think we need to do much more work in developing a coherent macroprudential framework before we start contemplating putting a number of countercyclical measures in place. such a framework needs to take into consideration how it interacts with other policies, such as microprudential policies – to ensure the safety and soundness of individual institutions and monetary policy – designed to help ensure a stable macroeconomy. when are these policies substitutes? when are they complements? how will they interact? how will the governance work in

, by making payments more convenient, faster, and more innovative. however, in europe, it also creates challenges, particularly if we become increasingly reliant on a few dominant non - eu players, such as international card schemes and global tech giants. these companies leverage network effects and control proprietary standards in retail payments, hampering competition and innovation in payments. ultimately, this increased reliance on non - eu providers raises concerns about the operational resilience and strategic autonomy of the european payment ecosystem. to help address those challenges, the eurosystem is preparing an important evolution in the central bank money services it provides to the general public, in the form of what 2 / 3 bis - central bankers'speeches is called the " digital euro " – a retail cbdc. and the banque de france is actively contributing to the preparatory work for what is intended to be akin to a " digital banknote " that will be available across the euro area, have legal tender status, be governed by european standards, and be distributed by banks and other financial institutions, to highlight just a few of its key foreseen characteristics, in addition to privacy. let me just stress here that in this retail space our action goes well beyond adapting our central bank money services. it also includes supporting the development of paneuropean payment solutions, such as epi's digital wallet, the wero, and pushing for an ongoing adaptation of regulatory and supervisory frameworks to support innovation. to conclude, let me share two convictions regarding the conditions under which the path towards the digitalisation of payments, including settlement assets, may lead to sustainable benefits. first we need a regulatory framework that does not stifle innovation but that is sufficiently demanding to ensure that stakeholders are protected and that the stability of the payment system, and the financial system more broadly, is guaranteed. second, we must complement this " confidence - prone " framework with central bank money services adapted to the coming digital age of payments, built on strong dialogue and comprehensive experimentation with other central banks – as we are doing with the mas – and with market participants. in the wholesale space, our objective at the banque de france is to adapt those services to ensure that central bank money remains at the heart of settlement processes. in the retail space, our objective is to widen the payment solutions and choices available to include a " digital banknote ". 3 / 3 bis - central bankers'speeches