on four challenges and how they can be overcome : the first is understanding digital finance fundamentals. in order to formulate policy and fulfil our supervisory and regulatory mandate, we need to fully grasp the intricacies of digital finance and the way it affects business models and risk profiles. this requires knowledge, experience and talent. innovation facilitators, such as innovation hubs and regulatory sandboxes, help towards building the relevant capacity. it is important to promote collaboration among those facilitators in order to reap greater benefits. two great examples in this area are the european forum for innovation facilitators and the global financial innovation network, which have contributed to information sharing on the regulatory treatment of digital finance innovations and set up frameworks for the crossborder testing of such services. second, we need to address regulatory gaps. crypto assets and decentralised finance, artificial intelligence, as well as cyber threats, have highlighted the limitations in the existing regulatory framework. in certain cases legislation is fragmented ; in other cases there are outright regulatory gaps. for example, stablecoins, which could play an important role in the future of finance, have the potential to be all but " stable " unless appropriate regulation is in place. in order to overcome the above challenges, we need to adapt our supervisory and regulatory stance. the european commission initiatives for the digital operational resilience act, and the market in crypto assets regulation, are prime examples of regulatory reform aiming to tackle this issue. other jurisdictions have engaged 3 / 4 bis - central bankers'speeches in similar activities. the oversight of cross - border entities will require intensified monitoring and cooperation at international level. allocating resources to this effort is crucial. third, we need to alleviate obstacles to financial market growth. we can address this challenge by supporting the smooth integration of digital finance into the economy in sustainable ways. facilitating the establishment of fintech ecosystems at national and international level is key. authorities are already pursuing this objective, especially in asia. this will create network effects and encourage investments and successful partnerships. removing obstacles to cross - border payments, as highlighted by the financial stability board, promoting targeted government actions in our jurisdictions and fostering transition to " green " digital services will also be key activities to overcome this challenge. last but not least, we need to overcome our own efficiency and adaptability limitations, to keep abreast with all the technological advances in the market. to do this, we need to increase our own

financial stability and avoiding disruptions of the transmission mechanism in times of stress. the aforementioned monetary policy measures were reflected in the evolution of the bank of greece balance sheet. regular monetary policy and ela refinancing and, more recently, its holdings of assets in the context of the eapp ( expanded asset purchase programme ) have accounted for the bulk of the increase in the bank of greece balance sheet. it should be noted that the bank of greece purchases securities from supranational organisations in the context of the pspp and securities of other euro area countries in the context of the cbpp3 according to its capital key. based on the latest figures ( august 2017 ), the securities held for monetary policy purposes by the bank of greece amount to around €55 bn. in july this year, the balance sheet was four times its pre - crisis level, after having grown almost fivefold in february 2012 and again in june 2015 following the two episodes of strong volatility in markets. part iii : recent economic developments in greece and the potential impact of monetary policy normalisation iii. 1 greek economy : recent developments and prospects confidence about greece ’ s economic prospects in general, and about the greek banks in particular, has been gradually restored. this is reflected in the following : successful return of the sovereign to the markets with the issuance of a new 5 - year government bond. a sharp decline in the greek government bond yields and their spread versus core countries ’ bonds, while the slope of the greek government bonds yield curve turned positive and became steeper, implying improved investor perceptions for the outlook of the greek economy — in line with the assessment of the rating agency fitch which upgraded the rating of greece — as well as a repricing of risks. improvement in the liquidity conditions of greek banks, as banks have improved their access 6 / 9 bis central bankers'speeches to the interbank market, while deposits show signs of improvement. this is illustrated by banks ’ declining recourse to central bank funding ( including to ela ) in the past two years. improved bank profitability and comfortable capital adequacy ratios. lower bank lending rates for firms, and slower deleveraging of banks ’ loan portfolios. improved external financing conditions, as bank credit to non - financial corporations ( nfcs ) has stopped declining since early 2016 and market financing of nfcs has increased. these are positive signs that greek companies are gradually getting access to market financing. this can substitute for part of the