securities and exchange commission. indeed, it is widely understood that all our activities need to evolve with changing market and technological realities. with the gramm - leach - bliley structure as background, let me turn to what i believe should, as we move forward, be our major supervisory and regulatory priorities in the areas of safety and soundness and competition policy. in my judgment, both the safety and soundness of individual banks and the stability of the overall banking system begin with strong equity capital positions at individual depository institutions. strong equity capital provides a cushion against unexpected losses that can be used without triggering a bank's default. more generally, strong equity capital lowers the probability that a bank will fail. strong equity capital also provides owners with a substantial stake in the future value of the firm and thus helps to control the safety net's moral hazard incentives to take excessive risk. from the perspective of day - to - day supervision, regulatory capital standards, the core of which are standards for equity capital, provide the foundation for nearly all supervisory and regulatory policies. the current set of regulatory capital standards, established in 1988 by an international agreement among the industrialized nations known as the basel accord, is in need of reform. the central role of such standards requires us to give reform a high priority. as you may know, such efforts are well under way. our efforts are focused on reforming the basel accord for those banks for which the current standards are most in need of repair. specifically, reform efforts are concentrated on developing standards that are more risk sensitive and that build upon the internal risk - rating and riskmeasurement systems that have been developed by the relatively small group of the world's most financially sophisticated and complex banks. these banks are engaged in a wide range of traditional and not - so - traditional banking activities, and their risk exposures and risk - management systems are often extraordinarily complicated. i expect that concrete proposals for reform will be forthcoming within a year or so. we must take the time to get these revisions right. i hope that the process, rather than being driven by the calendar, is being driven by a desire both to achieve more risk sensitivity and to acquire a meaningful understanding of the new accord's implications. both can occur only if the industry and the regulators work together to develop and assess the likely effects of the new accord. a second priority for bank supervisors is to continue to develop policies and procedures that ensure that no bank is too big to fail. by

andreas dombret : statement at the workshop on " digital finance regulatory challenges " statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the g20 conference " digitising finance, financial inclusion and financial literacy ", wiesbaden, 26 january 2017. * * * mr von weizsacker, ladies and gentlemen, for a first approach when talking about regulatory challenges in the age if digitalisation in finance, i would like to consider three aspects of financial technology and regulation : first, i perceive no general need for separate regulation ; to me it seems even detrimental to treat comparable businesses with equal risks in a different way, second, regulators have to stand ready to propose solutions for emerging risks. we should initially concentrate on the basics, such as setting the right incentives, but – beyond that – should refrain from regulating “ theoretical risks ". we should closely monitor fintech evolution to be able to act swiftly, once risks become relevant in practice, third, international exchange about experience with fintechs is very fertile to set the right course for future regulation from the outset. the way we perceive financial technology has transformed over the last years. when the buzzword “ fintech ” emerged a few years ago, everybody was excited : is there a better way ahead for doing finance – maybe even without banks? i also remember regulators in a state of anxiety : is traditional financial regulation unsuitable for high - tech financial innovations? today and up to now, we have a far more relaxed view about business disruption and regulatory challenges. in germany, fintechs have not forced us to overhaul existing financial regulation or to consider a new framework. the reason for this lies in the setup of german financial regulation : the rules apply to specific business models and their associated risks – technology is, by and large, treated neutrally. this becomes apparent in our financial services landscape. some digital innovators that actually accept deposits or lend money need to be licensed as credit institutions. for some other business models, the rules for financial services institutions apply. other innovative businesses remain unregulated, but this is for a good reason : they are non - financial in character and only provide auxiliary services complementary to financial services. by treating financial innovations equally under the regulatory framework, german regulators follow the maxim of “ same business, same risk, same rules ". but the important strategic question is : does this principle offer enough orientation for the future – given that no one knows how financial innovations