pressures for commercial banks. thirdly, this is good news both for consumers ( due to price gains ) and for the financial system as a whole, as it becomes more resilient and efficient. and lastly, operating in this new environment, central banks, as well as supervisors, must become more flexible and facilitate innovation – while taking into account new challenges and constantly building new regulatory and supervisory know - how. this might sound like a bold statement, but otherwise authorities risk failing to meet expectations in a rapidly changing and dynamic financial system. thank you for your attention! it has been my pleasure to address you. 3 / 3 bis central bankers'speeches

vitas vasiliauskas : central banking in the age of financial innovation – what does it take? speech by mr vitas vasiliauskas, governor of the bank of lithuania, at the conference " living without globalization? ", session 8 " digital transformation and innovation ", organized by the hamburgisches weltwirtschaftsinstitut ( hwwi ) and the reinventing bretton woods committee, hamburg, 4 july 2017. * * * good afternoon, ladies and gentlemen, firstly let me thank the other panelists for their insights. i would like to add some thoughts on financial services and central banking – their new mission in the age of innovation. i guess, some of these thoughts may sound unusual or even controversial. especially for a representative of a central bank that also holds the role of financial system supervision. however, this is our goal for today – to have a productive discussion, frankly sharing our thoughts and offering outside - the - box views. needless to prove the obvious : financial markets are changing. and they are doing so swiftly and fundamentally. in this light, central banks – being the guardians of financial stability – must alter the way they operate. to respond to new challenges, they need to become more flexible. otherwise – you see the poor guy in the picture – central banks and supervisors will stand with their hands tied, while the financial sector is moving forward, fueled by technological advance. yet while saying “ a ” we must say “ b ”. despite a surge in innovations, there still exists a vast unused potential. in practice, private actors may be held back by unfavorable market structure and regulatory environment. what these actors often need is a gentle push – a supportive stance from the authorities. on the other hand, authorities – and consumers as well – also face challenges. firstly, fintech developments formulate the need to balance innovation on one side and – stability on the other. adding to this, certain sectors – such as payments – may be ready for innovation. but they are hampered by high entry barriers, preserving relatively inefficient and costly systems. what is more, technological advances – like automated trading and investment – alter market structures. this calls for upgrades in regulatory frameworks. conventional wisdom and tools are often insufficient. central bankers and supervisors are thus facing a choice. they must either opt for an unconventional path, which requires broader outlooks, or risk lagging behind the markets. now let us look past the