of the single monetary policy. european financial integration is taking place gradually, with considerable progress having already been made. the degree of integration, however, varies across market segments, and integration is generally more advanced in those market segments which are closer to the single monetary policy. while the euro area banking markets for wholesale and capital market - related activities have shown clear signs of increasing integration since the introduction of the euro, the retail banking segment has remained more fragmented, leaving european firms and consumers unable to take full advantage of emu and the single market. see the introductory article of the special issue on the slowdown in productivity growth in the journal of economic perspectives 1988, vol. 2, no 4. the european commission recently estimated that the single market has brought about an increase of 2. 75 million extra jobs and an extra increase in welfare of €518 per head in 2006, corresponding to a 2. 15 % increase of the eu ’ s gdp over the period 1992 - 2006 ( see european commission, “ the single market : review of achievements ”, november 2007 ). ( iii ) supporting an innovative environment finally, to fully exploit productivity potential, the labour and product market reforms i have mentioned need to be accompanied by policies that support innovation and technological change. these include in particular measures to support innovation through higher investment in research and development, and policies aimed at improving human capital. first of all, europe needs more new and dynamic firms willing to reap the benefits of opening markets and to pursue creative or innovative ventures with a view to large - scale commercial exploitation. notably, it is new and smaller firms, rather than large ones, that are the job creators. an entrepreneur - friendly economic environment would imply less red tape for small and medium - sized enterprises, and help them to develop at home and abroad, as well as positive action to ease access to the finance they need. europe is significantly lagging behind in this field ; its venture capital financing, for instance, remains only a fraction of that in the us, relative to the size of its economy. finally, research and development as well as human capital make valuable contributions to tfp growth – a fact that has been known for some time. in 2006, r & d investment relative to gdp was only 1. 9 % in the euro area, compared with 2. 7 % in the us. while many member states expect to increase their r & d spending, the eu will fall short of its overall target of spending 3 % of gdp on r &

april 16, 2018 bank of japan central banking in the digital age closing remarks at the imf - jfsa - boj conference on fintech masayoshi amamiya deputy governor of the bank of japan introduction i would like to express my sincere gratitude to all the participants. it was a great pleasure for us, the international monetary fund, the financial services agency, and the bank of japan, to hold such a large conference on financial innovation in asia. indeed, this conference symbolizes how the world has changed in this decade. it innovation and changes in finance and economy looking back on 2008, a decade ago, the biggest challenge to the imf and financial authorities all over the world was how to tackle the global financial crisis. smartphones were still in their very early stage. crypto - currencies had not yet appeared. since then the world economic landscape has dramatically changed. the global economy has overcome the crisis and regained its growth momentum. with the rapid innovation of information technologies, the movement described as the " information revolution " or " data revolution " has developed globally, bringing new growth opportunities for financial services and economic activities. asia has been particularly influenced by such it innovation. let me pick up the issue of " financial inclusion " for example. this was a global social issue already as early as 2008. since then the number of smartphones has skyrocketed, and many people, including those in emerging economies in asia, have become able to access financial services via smartphones. it innovation has promoted " financial inclusion " in a way which was not expected a decade ago. such wider access to financial services is also stimulating various new economic activities. smartphones also produce a gigantic amount of data as people use smartphones everywhere in their daily lives. such " big data " are becoming more and more important as intangible assets in a broad range of economic activities. global " data - giant " companies, which have grown rapidly in recent years, often provide various services including financial ones free of charge, while utilizing big data gathered through these services for multiple purposes. moreover, it innovation has created new business models, such as " the sharing economy. " new policy challenges it innovation also raises various new challenges to financial authorities, including central banks. among them, let me point out four issues. ( i ) impacts on financial markets first, high - frequency trading, or hft, utilizing algorithms and ai has recently increased its role in various financial markets. financial authorities need to carefully examine