##kits, aligning them with the new generation of business models and technological solutions brought about by fintech. in recent years, similar formats for regulator engagement with the industry have sprung up widely – from canada to australia. arguably, these developments mark a shift in authorities ’ thinking – facilitating innovation instead of aiming to restrict it. in this regard, the idea of developing a central bank digital currency has recently been gaining traction. the task of issuing a central bank digital currency is indeed complex and requires extensive long - term efforts. yet it also offers substantial gains. these include increased transparency, more efficient payment and settlement systems and enhanced instruments for financial risk monitoring. with more flexibility come new responsibilities nevertheless – and here i have to put the strongest emphasis – with more flexibility come new responsibilities. while becoming more open to innovations, we – i mean both industry and regulators – cannot turn a blind eye on the associated risks. first of all – cyber risks, which, under intensifying digitalisation processes, attract elevated regulator attention. financial institutions increasingly base their operations on novel technological solutions, such as cloud computing. this certainly brings efficiency gains. but also makes financial firms more vulnerable to hacking and malware, placing vast amounts of data and critical ict infrastructure in a potential danger zone. today this challenge is particularly relevant in europe due to the ongoing regulatory shift towards ‘ open banking ’. it is therefore no surprise that international standard setters, such as the bank for international settlements, have recently become more active in this domain. as a result, today financial institutions and regulators are offered guidance – including the recent steps taken by the european central bank – that they can implement to enhance the level of cyber resilience. to strengthen these efforts, the international monetary fund has lately been putting more emphasis 2 / 4 bis central bankers'speeches on cyber risks within its surveillance and policy advice frameworks. nevertheless, digitalisation - induced risks for the financial system stem beyond cyber threats. financial innovations also tend to create additional room for ‘ shadow banking ’ to expand. it takes time to identify and fully understand these new and often obscure financial services, sometimes revealing regulatory and supervisory loopholes. through interlinkages with other financial institutions, this may eventually lead to a build - up of hidden systemic risk. in other words, in absence of adequate regulation, ‘ shadow banking ’ operations risk putting the whole financial system under threat. in the last several years, we have witnessed an increase in scrutiny towards ‘ shadow banking ’ activities on a global scale

24. 05. 2017 welcome address i conference on financial stability / banco de espana - cemfi luis m. linde governor good morning ladies and gentlemen, it is my pleasure to welcome you to this first conference on financial stability, jointly organised by the banco de espana and the centro de estudios monetarios y financieros ( cemfi ). thank you very much for your interest in and attendance at the conference. we have a very interesting agenda for today and tomorrow, structured around six sessions and a panel discussion covering a wide range of topics related to the theory and policy practice of financial stability. this event is bringing together distinguished speakers and discussants from central banks, international financial institutions and academia - a combination which will offer a diversity of perspectives and also ensure a lively and, for sure, interesting debate over the next two days. this conference has been possible thanks to the joint effort of banco de espana and cemfi. i am very grateful to the organisers, in particular to rafael repullo, director of cemfi, as well as to all the members of the scientific committee responsible for promoting this meeting and selecting the papers to be presented in the programme. this event has aroused particular interest among researchers, with - i am told - nearly one hundred papers having been submitted for just twelve slots. with this auspicious start, i trust this conference may become a regular forum of dialogue between researchers and policy - makers : central banks and financial supervisory authorities have many things to learn from the research carried out in academia, away from the frequent policy - making urgencies that drive the daily workload in our institutions. financial stability and macroprudential policy the last crisis generated a good deal of issues to be dealt with by authorities with a role in financial stability. the experience gained over recent years has shown the importance of safeguarding the stability of the financial system as a whole. we now understand that this ambitious task requires the use of sophisticated analytical tools to identify vulnerabilities at an early stage and anticipate how potential shocks can propagate across the financial system. to this end, both micro and macroeconomic methodologies can offer valid insights, and this is why the conference programme intends to offer a mix of both approaches. one of the most relevant and obvious legacies from the crisis is the introduction of a fullyfledged macroprudential policy framework. as we all know, macroprudential policy has, essentially, a