bank deposits are one out of many other components of financial assets. and bank deposits take many different forms. one should not forget that any financial asset is the debt of somebody else. in the case of bank deposits they are a liability, or debt, of the banks. the point here is that the possibly ongoing wave of new payment technologies is just one of a long historical series of innovations preventing any perfect definition of monetary aggregates, not to mention observing any stable correlation between such monetary ( stock ) aggregates and real economic ( flow ) variables such as gdp and inflation. if, say, a bond can be exchanged for another liquid asset, say a bank deposit, within a very short time span, why should it matter for the real economic decisions of a person or a company if their financial assets are held as a bond or a bank deposit? in other words, we are not able to control what people think of as money supply at a given point in time. and this should not worry us. as central banks we have not even con - page 4 of 6 trolled the supply of notes and coins, they are issued according to demand from the public. what matters for the real economy is rather the entire spectrum of financial assets and liabilities and the interest rates, which offer incentives to build up more or less of these assets. of course the vital factors from a central - bank perspective include financial stability, efficient payment systems and preserving the purchasing power. we should care for the health of banks and we should vigilantly monitor and sometimes control the development of credit, not least credit provided by banks. when it comes to payments based on bank deposits they serve the necessary characteristics for efficient digital currencies. they can be exchanged instantly ( admittedly in most countries it will still take some hours or days ), they are sufficiently safe as enough of them are covered by the deposit guarantee, and they retain their value because central banks ensure price stability. challenges still remain with respect to international payments. privately initiated so - called crypto - currencies do not meet these criteria. in particular, nobody and nothing stands behind their value, which may therefore fluctuate a lot and disappear entirely. their existence is for a start a consumer - protection issue. arguably, some people fully understand the products and volunteer to take upon them such risk. other users may not understand the risk. more importantly, should the general public and financial institutions engage in holding such risk to a very large extent, this may pose

. the single supervisory mechanism, anchored in the ecb, and the single resolution mechanism represent major progress. these institutions enable effective supervision of cross - border banks, they reduce barriers to competition, such as unwarranted differences in regulatory standards and practices, they reduce the risk of regulatory capture by local banks and not least, they are a precondition for a competition - friendly resolution of failing institutions. like all institution - building this work is not complete ( and probably never will be ), but banking union is about the single market, competition and innovation. these are not currency issues, and denmark would benefit from joining the banking union. in the meantime we should build our own regulation on the same principles – we are in any case all committed to joint eu regulation – seeking close cooperation and avoiding national peculiarities where they may unnecessarily block cross - border competition. market - financing and non - bank lending is rather limited in europe compared to other advanced countries. banks have many virtues, but we miss out in terms of diversification and competition if they are too dominant. this is acknowledged by the eu capital market union initiative. a major change from bank - driven financing to market financing is likely to occur slowly and gradually, but it should be encouraged. by its nature, market financing circumvents the vulnerability of bank intermediaries. but of page 2 of 6 course regulators should be vigilant towards bank - like risk occurring in other forms. new technologies may lead to shrinking or the disappearance of some of the financial intermediary activities we have been used to expect from banks only. currently this is particularly the case in the market for payments. some of this is driven by fintech start - ups. some is driven by competition - enhancing regulation such as the new payment services directive, which allows for third party access to bank accounts – of course based on explicit acceptance by the account holder. yet another source is large, well established world - wide it or network institutions expanding their range of activities based on their vast existing customer base. also the technology - driven competition is to be welcomed, but it comes with challenges as well. if new institutions go beyond payment activities, if they start taking deposits and provide lending – in other words if they become banks, they will need to be regulated as banks. if they become too dominant, competition may eventually suffer and any systemic importance for financial activities will need to be managed carefully by regulators. what does this innovative and competitive environment imply for