conference “ the new frontiers of digital finance ” paolo angelini deputy governor of the bank of italy digital finance and markets infrastructures consob auditorium rome, 10 march 2023 let me thank president savona and consob for inviting me today to talk about technological innovation in payments, securities clearing and settlement systems, i. e. the market infrastructure that is the backbone of our financial system. “ traditional ” digital innovation has been doing a lot for financial markets infrastructure i would argue that this is probably the sector least affected, thus far, by the latest technological developments that inspire today ’ s seminar. the adoption of digital technologies for financial market infrastructures started with the dematerialization of securities in the sixties. trading on digital platforms began to replace trading floors ( the “ pits ” ) in the eighties. in the nineties, real time gross settlement systems ( rtgs ) led to a revolution in wholesale payments worldwide, bringing added security to market transactions at affordable costs, thanks to their ability to effect a huge increase in efficiency ( a rise in the velocity of circulation of central bank money ). the next step was to eliminate counterparty risk in securities transactions via the adoption of delivery versus payment ( dvp ). 1 the emergence of fast electronic communication networks allowed investors to use real - time data for algorithmic and high - frequency trading, 2 which in europe now account for about 70 per cent of all equity trades. nowadays, reflecting a widespread dematerialization process, almost all financial assets are in digital form and traded through electronic platforms ; all wholesale payments are initiated and settled online. for example, the european large value payment system, target2, settles average daily transactions worth about 2. 5 trillion euro, one sixth of settlement systems implementing dvp perform a simultaneous transfer of the cask leg and the security leg of transactions on the counterparties ’ respective accounts. algorithmic trading implements order and trade decisions electronically and autonomously ( without the input of a human operator ). high - frequency trading is a subset of algorithmic trading in which orders are submitted and trades executed at high speed, usually microseconds, and a very tight intraday inventory position is maintained. the euro area ’ s annual nominal gdp ; 3 it can work jointly with target2 - securities ( t2s ), allowing dvp of the cash and security legs of transactions. so i would argue that, as far as market infrastructure is concerned, the digital revolution has already silently happened.

1970s and early 1980s. in the years 1982 - 83 to 1986, the state acquired considerable and well hidden savings in the form of higher government deposits with norges bank, matched by higher foreign exchange reserves. this capital was used during the recession and the currency crisis in the following years. it can therefore be said that the entire cash flow from petroleum activities was spent over the central government budget up to 1995. however, the revenues were used to finance current government investments in petroleum activities. after the construction of the petroleum fund started in 1996, the spending of petroleum revenues has been fairly independent of the cash flow in each year. this is a positive result. we also see that oil price swings have had little impact on the krone exchange rate. the correlation between changes in the nominal value of the krone and oil prices has been very low since 1999. this indicates that the system to keep cash flows from the petroleum sector outside the norwegian economy functions effectively in that the system has won credibility in financial markets. this is another positive result. since summer 2004, there has nevertheless been a somewhat stronger correlation between the krone and the oil price. a number of factors may have played a role here : there have been expectations that oil prices will remain high for several years. and considerable petroleum revenues have been circulating in the norwegian economy, partly as a result of government spending and partly due to the high level of petroleum sector investment. in the elaboration of economic policy in the national budgets, long - term considerations are always discussed when making decisions about the spending of petroleum revenues. two considerations are of particular importance : the aim of equitable distribution across generations and an industry structure that will in future provide us with solid revenue sources other than petroleum activities. the fiscal rule for the smooth phasing - in of petroleum revenues, which is designed to safeguard such considerations, thorvaldur gylfason, natural resources and economic growth : from dependence to diversification. discussion paper no. 4804, cepr see for example terry lynn karl, the paradox of plenty : oil booms and petro - states. university of california press 1997. see for example : j. m. davis, r. ossowski, j. daniel and s. barnett, stabilization and savings funds for non - renewable resources : experience and policy implications. occasional paper 205, imf 2001. j. m. davis, r. ossowski and a. fedelino ( eds. ), fiscal policy implementation in oil