to ensure that relationships with bigtech firms are included. this is because the potential network effects enjoyed by bigtech payment solutions and the upstream payment chain positions of these firms could create risks of competitive distortion, particularly in situations where these participants also provide hardware or software components. users could find themselves effectively captives of an ecosystem and left with no choice in terms of payment service, or at least be influenced by bigtech firms to use their services at the expense of competitors. this market power might also lead to high fees for payment transactions that could reduce the revenues – and hence the innovative capabilities – of partner banks. c. consolidate european integration and sovereignty in the area of payments the limits of europe ’ s integration and sovereignty in the area of payments have been highlighted once again by the entry of tech giants into the field of payments and the emergence of a systemically important project such as the libra / diem initiative, which could see non - european participants providing new solutions on the european market. although implementation of the single euro payments area ( sepa ) project was beneficial in supporting defragmentation for credit transfers and direct debits, non - european participants have been able to leverage regulatory harmonisation in their efforts to conquer the entire european market, whereas domestic participants have struggled to expand beyond their country of origin. meanwhile, european integration in the area of card payments has failed. the so called international card schemes exclusively manage all cross - border payments within the european union, not to mention a large share of domestic payments. this situation has created a dependency with multiple consequences. i am talking particularly about the definition and control of technical standards, financial aspects, but also challenges related to payment data, i. e. our capacity to protect these data and enforce compliance with european standards such as the gdpr, if decision - making centres are based outside europe. ii / what is the banque de france doing? 2 / 4 bis central bankers'speeches to help to meet these challenges, we at banque de france are focusing our activities around two main areas : 1 / support and implement regulatory frameworks and supervisory practices that promote innovation and the stability of our financial system most of the current regulatory framework predates the technological breakthroughs that we are now facing. accordingly, it makes sense to adjust the regulatory framework to these technological developments, the challenges they present and the attendant risks. the same naturally applies to our supervisory framework and methods. for this reason, we are actively involved in multilateral cooperation work, such as the

in times of trouble, sovereigns, like financial institutions can be either illiquid, or insolvent, or both. in many cases, the distinction is blurred. when uncertainty is high, sovereigns face liquidity shortages, and they can only issue new debt at constantly higher interest rates. this, in turn, creates doubts about their ultimate solvency, triggering a negative spiral. this process is clearly at work in peripheral europe, especially spain and italy, since the beginning of august. bis central bankers ’ speeches in short, sovereign solvency is partly endogenous. good fundamentals are an absolute necessity, but not always a sufficient condition. liquidity spirals, when allowed to develop, can lock a country, just like a financial institution, into a bad equilibrium. what is therefore the appropriate policy reaction? we had a continuing debate on that question in 2009 – 2010 when dealing with financial institutions. we are faced with the same question now regarding sovereign risk. the standard answer is twofold. first, get the fundamentals right. for european countries, it means reverting to a sustainable fiscal position which, in most cases, necessitates a significant primary surplus. necessary efforts are greater now since doubts have been created about sovereigns ’ ability to meet their obligations. and second, when solvency is achieved, there is a need for a liquidity backstop to ensure that bad equilibria will not be allowed to develop. where that backstop is coming from is a key question in the current debate. in most jurisdictions, but crucially not in the euro area, unconventional monetary policies have led central banks to purchase significant amounts of government debt : those purchases amount to 51 % of the total debt issued since 2009 in the uk, 21 % in the us and 7. 6 % in the euro area – where they were fully sterilized. although this was not the primary purpose, this policy stance has contributed to giving markets an insurance, or even an assurance, against a potential dry - up in liquidity. in all countries where significant amounts of debt have been purchased by monetary authorities, long - term interest rates have been kept at very low levels, irrespective of their fiscal situation. by contrast, purchases of sovereign debt by the eurosystem have remained extremely limited and will stay so. our objectives are very circumscribed : avoid disruptions in the monetary policy transmission mechanism. any lasting liquidity backstop has to come from