the benefits of innovation to accrue to the system, and so for it to advance. put simply, without trust innovation doesn't progress – because it doesn't take. innovation in the digital age – the balance of benefits and risks so if financial innovation is as old as finance itself, and the need for regulation to enable, frame and underpin that innovation has been a constant, what is new about the current phase of innovation in the financial sector – and why is there a need for regulators to take a different approach? stating the obvious, the main difference is that the current phase of innovation is primarily a digital one, with innovations in the financial sector taking place in the context of widespread technological advancements in our economy. this has led to different dynamics in terms of both the nature and pace of change – resulting in a wave of new entrants, new products and new ways of serving customers. such innovation is delivering some real benefits for consumers and society ; but it doesn't come without risks. for example, new entrants provide much needed competition in the interest of consumers ; this can also improve market functioning and is essential to a dynamic system and economy. but the market only functions when its parts do ; and from our own supervisory experience there have been growing pains with some of these new entities – with business models sometimes rushing ahead of control frameworks. new products are to be welcomed, and are essential to meet evolving consumer demands. with some of these however, there are questions of suitability – not to mention utility. in the digital age rapid adoption of new products by retail consumers can also pose a challenge, in particular for products with a risk profile that may not be suited for such investors. in this regard, some crypto - assets come to mind. while there is clear potential for distributed ledger technology and tokenisation to benefit the functioning of the financial system, given the volatility of some crypto - assets there are also clear risks to consumers and retail investors – which must of course be a focus for regulators. new ways of serving customers is not only beneficial but critical to keep pace with wider developments in society ; however for these benefits to endure it is essential that they are secure and resilient. as such financial services firms must invest in digitalising their operations, processes, and offerings while also ensuring they have adequate safeguards in place to limit 2 / 6 bis - central bankers'speeches potential risks. while always true, this is particularly important in a

with an iron fist. " this shows the delicate task of the chair in dealing with diverse if not diverging incentives. as to myself, i keep a few points in mind as chair of the board of the bank of japan. first, i welcome counter arguments or minority opinions, which contribute to a better decision in the end. secondly, i refrain from actions that might result in undue influences over the discussions. if i might give you a glimpse of the inner workings of the board, instead of making an opening statement, i always ask other members to identify issues and express their opinions. final words designing institutions and policies that incorporate appropriate incentive mechanisms plays a crucial role in determining the economic performance of an economy. policy makers, including the central bank governor, still have a lot to learn in this respect. through the next two days, i am looking forward to hearing from experts in this field, from both academic circles and central banks, their analyses and views on the designs of various incentive mechanisms in various institutions. it would be our utmost pleasure if every one of you could take home some insights from these discussions. thank you very much.