tougher accounting requirements come on top of those resulting from the basel iii reforms – even if there are bound to be some overlaps. it is precisely for this reason that i believe it makes sense to introduce the ifrs 9 requirements incrementally. the resolvability of institutions represents yet another challenge. following the first few resolution cases this summer, there was justifiably much talk of the lessons to be learnt from them. indeed, these are important. however, we must not lose sight of challenges elsewhere ; for, in a resolution case, there absolutely needs to be a sufficient capital buffer for a bail - in. the resolution authorities are currently in the process of setting such requirements, known as the minimum requirement for own funds and eligible liabilities ( mrel ), for european banks. some banks and savings banks will have to expand their holdings of mrel liabilities in future in order to satisfy these requirements. and clearly, this is a further challenge for integrated performance and risk management which cannot be met overnight. institutions should therefore be given sufficient time to build up their mrel ratios. sufficient account needs to be taken of the markets ’ absorptive capacity and the burden on institutions, on the one hand ; on the other, we must not lose sight of the aim of building up sufficient loss - absorbing capital in a timely manner. 4... and make relief a possibility given the challenges implied by the transitional period, we supervisors must generally look for ways to ease the burden on banks and savings banks without neglecting our mission. these are the things i advocate : first, that we should further strengthen the principle of proportionality in regulation and relieve small and medium - sized institutions. we already put forward specific proposals for a “ small banking box ” back in the spring together with the federal finance ministry and bafin. second, that we ask ourselves for each ad hoc inspection whether this is actually truly necessary, or whether it can perhaps be postponed to a future date. third, that the targeted review of internal models ( trim ) project under the ssm be conducted in a responsible and considered manner. we will also rigorously advocate the retention of risk sensitivity going forward. 5 time for a regulatory break the next assertion i wish to present to you is this. i am convinced that the current projects should be followed by a sort of regulatory break, for we will have then covered the main areas. for you, the banks, this means that you need at the earliest possible opportunity

. we want to be more open about our assessment, but great care has to be taken to avoid a situation where revelations about emerging concerns lead to acceleration of those concerns and becomes a self - fulfilling prophecy. as i look forward and ponder the forces that are shaping the evolution of the global financial system, the fsb is currently grappling with two issues — financial innovation and market fragmentation — that have the potential to profoundly affect financial stability, so let me start there. owing to our forward - looking orientation, the fsb has been actively engaged in monitoring financial innovation for some time. starting a little over five years ago, there was an explosion of 4 / 6 bis central bankers'speeches financial innovation that had a technological component, which we now call fintech. this encompasses peer - to - peer lending, cryptocurrencies like bitcoin, and the use of new techniques like artificial intelligence and machine learning. in 2017, the fsb issued a report on the implications of fintech for financial stability. the report was careful to note the potential benefits of many of these innovations, including the possibility of greater financial inclusion and increased speed of financial transactions. however, the report also drew attention to several supervisory and regulatory issues, including three priorities where international collaboration is critical : managing operational risk from third - party service providers, mitigating cyber risks, and monitoring macrofinancial risks that could emerge as fintech activities increase. 1 more recently, one particular area of fintech has received a lot of attention — stablecoins. these are a type of crypto - asset that attempts to address the volatility of some crypto - assets by tying their value to conventional assets, such as the value of the u. s. dollar or a basket of currencies. while it hasn ’ t been created yet, it is facebook ’ s proposal for a new stablecoin that significantly increased the public ’ s attention to stablecoins. at the fsb, we undertake regular monitoring of the financial stability implications of crypto - assets, and we have had discussions about the regulatory and supervisory approaches to crypto - assets and potential gaps in regulation. the introduction of stablecoins, however, brings a potentially new scale and scope that the financial regulatory community must carefully consider. although there is a small risk to financial stability today, there is no doubt the potential scale of stablecoins and other crypto - assets yet to emerge may pose regulatory challenges. at present, the