francois villeroy de galhau : the role of banking in a sustainable global economy speech by mr francois villeroy de galhau, governor of the bank of france, at the world conference of banking institutes, london, 17 september 2019. * * * ladies and gentlemen, i am delighted to be with you today. the topic that you have asked me to address – “ the role of banking in a sustainable global economy ” – prompts us to think about the future. however, let me first say a few words about the present. the current context is one of increased uncertainty, which is already weighing on growth at the international level. two threats are contributing to this : above all, trade tensions coming from the us, and second – of course – brexit. needless to say, this situation is not sustainable. it is the responsibility of politicians more than central bankers, to restore confidence. the latest example of this uncertainty is the spike in oil prices after the attack last saturday on saudi arabia ’ s oil infrastructure. it is too early to rush to hasty conclusions ; we should closely monitor the consequences on the oil market, which is characterised by a rather flexible supply and a subdued demand. oil price has significantly decreased since june, by about 20 %. if it lasts, this latest oil shock could increase inflation and hamper growth. in my remarks today, i will briefly start with brexit before addressing two of our shared challenges for the future : digital transformation and green finance. i. the prospect of brexit and our future relationship let me say from the outset that brexit is and remains bad news, not only for the united kingdom, but also for europe. but we respect the british choice, whatever it turns out to be. at this stage, both the british and europeans are faced with great uncertainty surrounding the outcome. we are still hoping for a deal, but we have to be ready for a no - deal and all the risks it entails. supervisors both at national and european levels have encouraged and monitored the implementation of contingency plans by the financial industry : on our side, we are ready. let me add one word on the future relationship between the uk and the european union. after brexit, we will obviously no longer belong to the same european club, but we will hopefully remain close partners and friends. the uk will continue to participate in international forums – such as the g7, g20 fsb, bis, etc. –

where cooperation will be much needed to face our common challenges such as financial stability, digitalisation and the regulation of bigtechs, as well as the challenge of green finance. in a context where the multilateral order is being put at risk, let me express the wish that the uk, together with the eu, may resolutely strive to renew multilateralism. on our side of the channel, our collective response to brexit may possibly be a further integration of europe, with the new and promising commission led by ursula von der leyen, rather than isolationism or paralysis. europe should build on its most valuable assets : the euro, which is celebrating its 20th anniversary this year, the single market and its shared social and environmental model. ii. making the digital leap with lucidity let me now turn to our shared common challenges. digitalisation is shaking up the way we live and consume, opening up a world of possibilities for corporates and customers alike. worldwide, it clearly represents both an opportunity and a challenge for banks, as well as for supervisors. new players are becoming increasingly important. fintechs do not have the capital resources to disrupt incumbent banks and can even be acquired by them. by contrast, bigtechs do have the potential to fundamentally redefine financial intermediation : they have strong brand recognition, a 1 / 4 bis central bankers'speeches worldwide customer base and privileged access to cutting - edge technologies. this new situation is a major challenge for regulators and supervisors. of course, financial regulation should remain technologically neutral : the basic principle “ same activity, same rules ” must apply. this is a good thing for the level playing field. however, beyond traditional financial regulation, international cooperation should be developed in four areas, four cornerstones of the regulation of digital finance. first, cybersecurity is a sine qua non for a reliable and sustainable digital future. it was a clear priority of the g7 french presidency this year. second, regarding data protection, financial supervisors and authorities in charge of privacy have to invent new ways of cooperation to address data issues that have become central to financial services. third, regarding competition and anti - trust policies, situations where “ the winner takes most ” while staying outside the scope of financial regulation should be adequately anticipated and addressed. and fourth, fair taxation, thanks hopefully to oecd work. “ stable coin ” projects, including facebook ’ s libra, are a case in point. “