computing, artificial intelligence and blockchain is transforming the way financial products are designed, processed and distributed. for its advocates, this transformation promises : better consumer experiences ; more diversified financing of the economy ; and greater efficiency of the financial system. in addition to these promises, cutting - edge technologies also lower the entry barriers to the financial sector for early adopters : the tech firms. this should not come as a surprise : internet and smartphones have lowered the distribution costs, big data technologies have lowered production costs and the shrinkage of banks ’ balance sheet in the wake of the great financial crisis has given space for new players to conquer market shares. 1 / 6 bis central bankers'speeches balance - sheet - light payment services have so far been the main gateway to the financial sector for tech firms. from there, tech firms have an avenue to expand their business further along the value chain, from payment to retail and commercial banking, wealth management and insurance. the tech firms ’ model is based on the unbundling of traditional universal banking into an array of distinct core functions ( such as channelling payments, providing financing, sharing risk and allocating capital ), which are reassembled in an online platform. in this model, the control of the platform is more strategic than the provision of financial services itself. ( b ) among these tech firms, the fintech start - ups ( also known as simply “ fintechs ” with an “ s ” ) and the bigtechs are likely to have a different impact on financial intermediation. fintech start - ups have already been a game changer in the financial sector. they have imported a customer - centric culture from the internet industry into the financial sector and they have targeted and called into question many of the long - standing financial rents. however, fintech start - ups do not have the capital resources to disrupt incumbent banks and their future role is likely to be shaped by two main alternatives : to be acquired by an incumbent bank or to compete on niche segments such as equity crowdfunding or market place lending. it could be different with bigtechs. the market capitalisation of the gafa companies – google, amazon, facebook and apple – is 25 times higher than that of the whole fintech universe. bigtechs already have a material footprint in financial services, and not least in payment services : amazon pay operates in 10 countries, google pay in 22 countries and apple pay in 25 countries. facebook messenger allows peer - to -

policy to push term premiums far down into negative territory, one should be prepared to accept that this approach may bring with it an elevated conditional volatility of rates and spreads. when we talk about the interplay of monetary policy and financial stability, i think that this kind of tradeoff is an important part of what we should be bearing in mind. indeed, maybe the term “ financial stability ” is a bit misleading, because the risk scenario that i am describing – and that may be among the most relevant when thinking about the costs and benefits of our current highly accommodative policies – need not be one that is so dramatic as to call into question the viability of any large financial firm or threaten an important part of the market ’ s infrastructure. rather, one scenario to be worried about may simply be a sharp increase in marketwide rates and spreads at an inopportune time, such that it becomes harder for us to achieve our dual - mandate objectives. having said all of this, i believe we are currently in a pretty good place with respect to the pricing of interest rate risk. the movement in treasury rates that we have seen since early may has led to somewhat tighter financial conditions in certain sectors – most notably the mortgage market – but has also brought term premiums closer into line with historical norms, and thereby has arguably reduced the risk of a more damaging upward spike at some future date. on net, i believe the adjustment has been a healthy one. finally, let me say a few words about last week ’ s fomc meeting. i voted with the majority of the committee to continue our asset purchase program at its current flow rate of $ 85 billion per month. it was a close call for me, but i did so because i continue to support our efforts to create a highly accommodative monetary environment so as to help the recovery along by using both asset purchases and our threshold - based approach to forward guidance. how should the pace of purchases evolve going forward? the chairman laid out a framework for winding down purchases in his june press conference. 9 within that framework, i would have been comfortable with the fomc ’ s beginning to taper its asset purchases at the september meeting. but whether we start in september or a bit later is not in itself the key issue – the difference in the overall amount of securities we buy will be modest. what is much more important is doing everything we can to ensure that this difficult transition is information on the chairman