, and is well beyond the scope of my comments today. here i will limit myself to examining the basic principles that in my view should inspire regulation in a sector characterized by the presence of many different kinds of providers – banks, fintech start - ups and the big - techs – and the fast pace of innovation. in this context, the main challenge for the authorities is to strike the right balance between the overriding objectives of promoting innovation and competition on the one hand, and those of preserving the integrity of the financial markets and guaranteeing consumer protection on the other. regulation should be designed in order to achieve such objectives. first, it should guarantee a level playing field, in order to avoid regulatory arbitrage and distortions. regulation should remain tech - neutral, treating the intermediaries that deliver the same services in the same way, focusing on the products offered and not on the technology or business model used to provide them. second, given the rapid change that will affect the fintech sector in the future as well, regulation and supervision should be flexible, in order to encourage innovative projects and to avoid any obstacles to the changes that are also likely to affect the supply of technology - intensive services in the future. the strategies adopted to guarantee an “ agile ” regulatory environment for fintech start - ups differ across countries. in some countries ( such as the united kingdom ) innovative start - ups can benefit for a limited time period from regulatory waivers while they test the provision of their services ( this is the “ sandbox ” approach ). in other countries, such as singapore, the authorities may cooperate with fintech firms to develop specific services – possibly through partnerships – in what are commonly called “ incubators ”. lastly, in other countries – including italy – the strategies are based on “ innovation hubs ”, where the authorities start interacting with the market players ( banks, financial companies, innovative start - ups ) on fintech - related issues at an early stage, indeed often at the planning stage, in order to provide them with the necessary support for the regulatory and compliance issues. the banca d ’ italia launched in november last year its innovation hub ( canale fintech ), a dedicated space on its web site where operators propose financial projects with innovative features ; the aim is to open up a channel of dialogue with operators and to support innovation processes. 14 each approach has its pros and cons that must be carefully weighed up. 15 third, a true level playing field would require

stephen s poloz : release of the financial system review opening statement by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the financial system review, ottawa, ontario, 10 december 2014. * * * good morning. senior deputy governor carolyn wilkins and i are pleased to be here today to discuss the december issue of our biannual financial system review ( fsr ), which we published this morning. the purpose of the fsr is not to predict the most likely outcomes for the financial system. instead, we use it to highlight key financial vulnerabilities and the catalysts that could turn those vulnerabilities into a risk to the financial system. the fsr is an essential complement to our monetary policy report. together, the two streams of analysis provide the basis for a fulsome discussion of monetary policy, within a risk - management framework. although we view risks to the financial system separately from risks to growth and inflation, we think carefully about the interplay between them. in this fsr, we discuss three important financial system vulnerabilities : high household indebtedness ; imbalances in the housing market ; and increased investor risk taking. to some extent, all three are normal side effects of stimulative monetary policy. however, the post - crisis recovery has been frustratingly slow – we have called it serial disappointment – and bond yields and policy interest rates have been unusually low for a long time. in this context, these financial vulnerabilities have built up over time. fortunately, canada ’ s economy is showing the first signs of a broadening recovery. nonenergy exports have been responding to stronger u. s. growth and exchange rate depreciation, investment spending appears to be picking up, and we have seen pockets of new job creation. this natural rebuilding sequence is key to reducing financial vulnerabilities over time. in particular, our expectation of a soft landing for housing hinges on stronger growth, employment and incomes. the recent weakness in oil and other commodity prices raises important risks to this economic outlook, however. this shock is especially complex : it is likely to boost global growth but to moderate growth and inflation in canada, even though the effects should be tempered by exchange rate depreciation and stronger non - energy exports. the potential consequences for the financial system will be monitored carefully in the months ahead. meanwhile, the global financial system is stronger and more resilient, thanks