yannis stournaras : assessing the impact of digital finance on financial and economic integration - risks, opportunities and challenges for central banks speech by mr yannis stournaras, governor of the bank of greece, at the 2022 conference of mediterranean central banks " building resilience in uncertain times : safeguarding financial stability, encouraging investments ", jointly organised by the central bank of the republic of turkey, the organisation for economic co - operation and development ( oecd ), the european institute of the mediterranean ( iemed ) and the bank of spain, istanbul, 31 october 2022. * * * ladies and gentlemen, it is a great pleasure and honour to participate in the 7th annual conference of mediterranean central banks to discuss the critical topic of building resilience in the financial system. resilience is key, especially during these uncertain and challenging times, which combine heightened inflation and increased debt levels, market volatility and high energy prices due to the war in ukraine, as well as intensifying climate related risks. in this demanding environment, we need to encourage financial markets to flourish and support our economies in a way that fosters economic integration and strong cooperation. in this session, i will focus on a topic that has demanded our attention in recent years, that is the evolution of digital finance. how has it impacted the financial system? what are the benefits it has brought alongside risks? what challenges are we facing, or are we soon bound to face? i will share some thoughts on the stance that central banks and regulatory authorities may take to overcome these challenges. beyond any doubt, almost every aspect of our everyday life is becoming increasingly digital. it is no wonder that financial services follow this global trend. consumers and businesses access financial services digitally, market participants are deploying new or existing technologies in innovative ways, incumbent firms'business models are being transformed, and data is becoming a key asset for innovation, alongside it infrastructure. n 2020, acknowledging the importance of these trends, the european commission published its digital finance strategy. its key objective is to embrace digital finance for the benefit of consumers and businesses. digital transformation offers benefits and opportunities that can have a positive impact on financial and economic integration across borders, creating links between economies both at regional and at global level : economic processes, such as supply chains, benefit from increased efficiency gains. certain processes which took weeks or even months in the past may now be completed in hours or days. payments have become faster, acting as a major

technological footprint and infrastructure capabilities. central bank digital currencies ( cbdcs ) have the potential to enable safe retail and wholesale payments with central bank money. this will affect citizens across borders. careful design of cbdcs and their distribution models will address disintermediation concerns. issues such as the cross - currency payments in cbdc and the potential of foreign users gaining access to domestic cbdc merit discussion at international level. furthermore, as mentioned in a recent bis report, liquidity bridges for cross - border payments across central banks may improve the efficiency and effectiveness of the global liquidity pool of banking groups operating in several currencies, and reduce the opportunity costs associated with holding liquidity buffers in multiple currencies. upgrades to central bank operated market infrastructures, potentially in the form of interoperability with distributed ledger solutions, may also enhance the uptake of digital finance in regulated crypto services. finally, the adoption of supervisory technology, or suptech, will help us modernise our interaction with supervised entities and revolutionise on - site and off - site auditing capabilities. let me conclude by saying that the evolution of digital finance is continuous and rapid. keeping up with this speed in the four aforementioned challenge areas will be very demanding. joining forces and sharing experience as frequently as possible, as we are doing now in this conference, will help us safeguard financial stability and underpin growth in increasingly integrated financial markets. thank you. 4 / 4 bis - central bankers'speeches