denis beau : for a contribution from our fintech ecosystem to a more efficient and stable financial system speech by mr denis beau, first deputy governor of the bank of france, at the fintech r : evolution 2020, paris, 15 october 2020. * * * ladies and gentlemen, i am delighted to take part in this 5th edition of fintech r : evolution and i would like to warmly thank the france fintech association and its chairman alain clot for their invitation to speak today. this event, organised against the backdrop of the ongoing health crisis, is proof of the drive, determination and adaptability not only of the organising association, france fintech, but also of the entire innovative french ecosystem of the financial sector, which is now represented here as widely as possible. the french fintech ecosystem, like any ecosystem made up of start - ups, is fragile but it is promising and, i believe, vital to the financial sector. the economic crisis associated with the health crisis highlights these contrasting characteristics : on the one hand, start - ups may be weakened or innovative projects delayed by the economic situation ; and on the other hand, the health crisis has accelerated the adoption of new digital habits by the entire population. more generally, 2020 has only served to underscore the challenges facing the financial ecosystem as a whole as a result of the digitisation of our economy. in order to meet these challenges, it is imperative that this ecosystem transforms to accommodate changes in demand for financial products and services, the increased competition that is driving down profitability and the fast - growing need for operational resilience. in this context, a thriving, creative and efficient fintech ecosystem may be a key element in the transformation of the financial system towards greater efficiency and resilience to shocks. this is why, as central banker and supervisor in charge of ensuring monetary and financial stability, i feel it is important to support this fintech ecosystem and facilitate its smooth integration into the broader financial ecosystem. naturally, i would like to make it clear that this integration does not, in my opinion, mean a convergence of players, a “ harmonious ” cooperation or a coordinated approach : the various players have different, sometimes even opposing goals, and that is how competition works. however, we should not systematically pit fintechs against established players : there is a great variety of relationships between these two worlds, as we see every day. the potential for enriching the financial ecosystem and making it more efficient and resilient lies in

case, it is obvious that any funding support from the eurosystem would have to be carefully re - assessed, as our operational framework serves the implementation of monetary policy, and is not meant to cater for all individual banks ’ liquidity needs, irrespective of what causes them. in the euro area, it is the responsibility of the national central banks at their risk and cost, possibly guaranteed by the government, to act as the lender of last resort. banks should take all appropriate measures to reinforce their balance sheets as well as their capital base, thus creating conditions under which they can fund themselves in the market once market conditions return closer to normal. we do not know today what normality will look like after the crisis. we may have to perform our monetary policy in an environment that is somewhat different from the one prevailing before the turmoil. for instance, one might expect to observe higher liquidity and risk premia on the markets than during the period that preceded the crisis, and possibly also reduced activity in some longer - term unsecured market segments. if such changes imply that for any given policy interest rate, the monetary conditions are somewhat tighter than they would have been in the pre - turmoil period, that will of course have to be taken into account when setting the policy rate. but such “ new facts of life ” do not necessarily require any major change in the operational framework. we shall of course consider thoroughly what lessons are to be learnt from the crisis, but so far, the framework that prevailed prior to the turmoil, featuring a broad universe of counterparties, a long list of eligible collateral and large refinancing operations, seems to provide a good benchmark. it served us well before the crisis, and could be adapted quickly as circumstances worsened. 3. the interplay between fiscal and monetary policy while the current challenges for monetary policy are immense, those for fiscal policy are even greater. fiscal policy in most advanced economies does not just have to exit from the fiscal stimulus and support measures taken in response to the crisis. even with these measures reversed, fiscal policy still faces at least three important challenges. first, even excluding crisis - related stimulus measures, most advanced economies are still left with historically high deficit - to - gdp ratios, which, viewed from today ’ s perspective, are largely structural in nature. to put it another way, given the lower actual and potential post - bis central bankers ’ speeches crisis output and correspondingly lower post - crisis tax revenues, pre - crisis