) implications for financial stability digital financial innovation and the entry of new providers of financial services may not only affect productivity and [UNK] but may also have important consequences for financial stability. in financial services, unlike in other industries, increased competition may not be welfare enhancing ( corbae and levine 2018 ). instead, the link between competition and risk in banking is non - linear ( martinez - miera and repullo 2010 ) : a low degree of competition generates monopoly rents which the bank manager wants to protect by investing in safe assets ( keeley 1990 ). accordingly, risk would increase if competition becomes more intense. however, weaker competition also drives up interest rate costs, borrowers choose riskier projects, and banks become riskier ( boyd and de nicolo 2005 ). if this mechanism dominates, increased competition would tend to lower risks of individual financial institutions. reflecting the opposing theoretical mechanisms, empirical studies find it [UNK] to establish a clear relationship between competition and risk, and the link between risk and competition depends on the type of bank and the type of risk considered ( freixas and ma 2014 ). changing patterns of competition in the banking industry can have implications for financial stability that go beyond those for individual banks. [UNK] exit can lead to overcapacity and excessive risk - taking by weakly capitalized banks, weaken aggregate profitability, and limit banks ’ ability to rebuild buffers following negative shocks. generally, the link between competition and financial stability depends on the nature of the shock, risk - taking incentives at the level of the individual firm, and the overall structure of the banking system. in a highly concentrated banking system, dominated by a few banks, an idiosyncratic shock hitting a large financial institution can have repercussions for the entire system ( granularity effects or “ too big to fail ” ). but a decentralized and weakly competitive banking system populated by many small banks might also have destabilizing features. if many smaller banks are exposed to the same ( macroeconomic ) risks, this may create systemic instability as well ( “ too many to fail ” ). how the entry of new firms and the use of new technologies in the provision of financial services affects financial stability is thus hard to predict. it depends on changes in the riskiness of individual institutions and on structural features of the financial system such as the degree of concentration, interconnectedness, and commonality in the exposure to shocks. assessing the costs and benefits of new financial technologies is, therefore

##e, british columbia. that act, 128 years ago today, concluded the construction of the railway system upon which canada was built. we are very lucky to have the last spike with us here today. well, sort of the last spike. every spike has a story. in actual fact, there were three spikes. the first was damaged when it was hammered in, so it was removed and turned into jewellery. the second “ last ” spike was removed shortly after it was driven in to make sure that no souvenir hunters grabbed it. it was eventually transformed into a carving knife. the spike we have here today truly is the “ last ” spike, in that it ’ s the one that has lasted. it was supposed to be driven in by the governor general of the time, lord lansdowne. an unforeseen glitch that canadians throughout history can relate to – a snowstorm – prevented lord lansdowne from attending the ceremony, so he mounted the spike and sent it to sir william van horne, the cpr executive who led the project. but to tell us more about canada ’ s railway, i would like to ask marc laliberte, president and ceo of via rail, to come to the podium. bis central bankers ’ speeches