mr. meister discusses the future of money and financial services statements by mr. edgar meister, a member of the directorate of the deutsche bundesbank, to be put forward at the generation bridge symposium “ money tomorrow ” in eltville on 11 / 9 / 98. first statement : supervisors are open to innovations in banking business — but banks and financial intermediaries in general must be able to manage the risks arising from new techniques. supervisors have never stood in the way of innovations in banking, but instead have always worked hard to give entrepreneurs in this field a reliable legal basis for product development. for example, the legal definition of banking operations in germany was extended to include prepaid card business and network money business by amending the banking act. yet attention must always be paid to sensitivity in confidence and to possible dangers for the functioning of the financial system. disruptions in payment transactions — even the defaulting of a financial market participant — can rapidly affect financial markets adversely and even hamper the development of the real economy. things are only in their infancy. the issuance of electronic money should generally be restricted to banks. that is primarily for reasons of safety ; banks as issuers of electronic money are regulated and monitored according to prudential guidelines. to keep monetary policy efficient the option to introduce minimum reserves on electronic money makes sense. second statement : recent financial crises have proven again : progress in information technology and new risk management techniques cannot replace solid capital requirements for banks. internal risk models for the calculation of capital requirements for market risks are important innovations in the field of risk management - supervisors respect such developments. but risk models are not infallible. against the background of recent financial crises there are some doubts whether short - term high market volatility has always been covered adequately by the assumptions of the models ( which use 250 days averages for volatility ). credit risk models which are developed now can help to measure credit risks more exactly. capital requirements however must cover all risks of a bank, i. e. operational and legal risks, too. consequently a licence to use credit risk models or generally new risk management techniques must not result in weaker capital requirements for banks considering generally rising risks in the financial world. precisely the recent financial crises demonstrate how difficult it is to determine bankspecific risks with sufficient accuracy. own capital as a cushion for losses is therefore a modern prudential requirement. third statement : the banking world will be changing even faster - but neither the size

times. as technologies advance and digital forms of money increasingly enter the field, policymakers will not be able to remain “ on the sidelines ”. there are two sides to every coin, after all. on that note, i would like to wish you all a very pleasant and interesting evening. you still have to decide between an excellent red and an equally excellent white wine. the choice is yours. perhaps a coin toss will help. thank you. 1 deutsche bundesbank ( 2018 ), payment behaviour in germany in 2017 – fourth study of the utilisation of cash and cashless payment instruments. 2 ibid. 3 / 4 bis central bankers'speeches 3 deutsche bundesbank ( 2019 ), the cost of payment methods in the retail sector, monthly report, june 2019, pp. 65 – 79. 4 / 4 bis central bankers'speeches