addressed within the confines of the financial sector. increasingly, non - financial data, like for instance the data your car produced on your way to this conference, are key to innovation in the financial sector. developing a framework for data access must therefore be done at the horizontal level. but that means that financial policymakers do have to have a seat at the table when these regulations are being developed. this requires a shift in the thinking of both financial and non - financial regulators. more horizontal cooperation needs to be mirrored by more international cooperation. for example, the rise of platforms comes with the risk of regulatory arbitrage, far more so than was the case in traditional finance. international consistency is needed in how platforms are regulated, for instance in the regulatory approaches to bigtechs. another key example is stablecoins, where we have seen different jurisdictions moving towards regulation, and where consistency is especially needed. this will only become more important as decentralized finance grows. and given the pace of developments, it might be wise to build flexibility into the regulatory framework. this could be done by adopting a more principle - based regime at the level of the primary legislation while delegating more to the european supervisory authorities ( esas ). i know very well that there are legal considerations making it difficult to achieve this. but we should push the boundaries here to ensure that the regulations of fintech are as effective as possible. at global level, the fsb has a key role in ensuring an overall consistent approach, and for bringing all the necessary expertise together. next to regulation, the sector's changing structure also calls for us to rethink supervision. first, i believe we should look more towards the eu - level, and where necessary move financial supervisory tasks related to fintech to the esas. a good 3 / 4 bis - central bankers'speeches example of this is micar. moreover, the remit of financial supervisors may have to be expanded so they can continue overseeing key parties in the financial value chain. the dora regulation makes this possible by introducing financial oversight of non - financial critical third - party providers. to make that oversight as powerful and efficient as possible, i do believe it should be properly resourced and as much as possible centralized with one of the esas. in addition, as the lines between financial and other sectors blur, we need cooperation arrangements with other types of supervisors. these can take different shapes depending on the issues at hand. in the netherlands, for example, supervision

andrew bailey : the challenges in assessing capital requirements for banks speech by mr andrew bailey, executive director of the bank of england, at the bank of america merrill lynch conference, london, 6 november 2012. * * * thank you for inviting me to speak today. i want to talk about the challenges bank supervisors face in determining the appropriate approach to assessing the capital requirements for banks. scarcely a new subject i know, but nonetheless one that is at the top of the agenda of regulators, both macro and microprudential. my starting point today is not whether banks are, or are not, adequately capitalised – i will come to that – but the framework by which supervisors assess capital needs, a subject that is attracting a great deal of attention. i will put my cards on the table at the start. i am not a believer that supervisors should rely on any single data point when assessing a given firm ’ s stability. we need to assess measures of capital, liquidity and leverage. the art of supervision is to look at a situation from several angles and seek thereby to identify weaknesses. good supervision is about judgement. the psychologist and behavioural economist daniel kahneman has described good judgement as, “ the product of a solid grasp of intuition coupled with empirical validation where possible ”. there was too much box - ticking in the past, but i do not intend there to be in the future. i was dismayed to hear recently a commentator saying that, “ supervisors will never be more than box - tickers ”. wrong. if you don ’ t agree, meet my colleagues. i was also interested to read recently a claim that today supervisors are unable to stand up to the banking lobby. wrong. we accept that in a judgement - based approach to supervision, there will be disagreement. we don ’ t seek disagreement for the love of it, but it is part of what we do. in terms of how supervision is done, my preference is to start with a risk - based approach to assessing capital needs and then back that up with other risk - based approaches and a simple non - risk based approach, like a leverage ratio. the general approach is also the one that we are developing for insurers by designing early warning indicators to act as a check on the modelled risk - based approach. why do i start with a risk - based approach? because there is a logic to the approach of the supervisor mirroring how the firm manages risk for itself. i would be horrified if a firm said to