was that risks depend to a large extent on how banks are set up. have they agreed on floating rate loans with their customers or on fixed rates? how long is their average asset duration? for a majority of large european banks in the test, higher interest rates would lead to largely contained risks and also a higher net interest income in three years ’ time. an interest rate hike therefore poses individual challenges for banks and requires individual remedies. problems caused by the monetary policy change particularly in the us are, of course, not confined to financial institutions. there is a general and empirically tested idea that emerging countries may also suffer. historically, we have witnessed large capital inflows to emerging countries in so - called “ risk on ” periods, where capital was abundant in advanced economies and when conditions nurtured the “ search for yield ”. flights to safety or monetary tightening of the us dollar have led to capital outflows from emerging countries, currency depreciations, and financial crises. recently, in the spring and summer of 2013, talks about monetary tapering led to sharp exchange rate reactions. however, emerging countries are not completely at the mercy of global factors such as the monetary policy of large economies or international economic cycles. one obvious precautionary measure is to build up foreign exchange reserves. this “ safety shield ” allows these countries to dampen depreciation pressure. indeed, emerging economies have accumulated a large stock of foreign exchange reserves in the last 15 years. recent empirical research by the bundesbank1 indicates that foreign exchange reserves are indeed an effective tool to counter depreciation pressure. but it also shows that the monetary “ safety shield ” is not a cure - all. in order to keep private investors in the country, a country should rather strive for a healthy policy mix that targets domestic economic development. 3. bundesbank representatives in mumbai ladies and gentlemen our concern for financial stability requires us to cast our net wide and always keep track of the 2 / 3 bis central bankers'speeches latest developments in the most important economies of the world. for the bundesbank, our representatives and representative offices abroad fulfil an important role in this respect. i would like to first thank mr alexander sattler for his service in mumbai from october 2014 until september of this year. he has been here during eventful times. among other things, india has seen a strong reform momentum – the reform of tax on goods and services being the most recent result. india ’ s

carl - ludwig thiele : industry dialogue on " distributed ledger technology - potential benefits and risks " introductory statement by mr carl - ludwig thiele, member of the executive board of the deutsche bundesbank, at the g20 conference & quot ; digitising finance, financial inclusion and financial literacy & quot ;, wiesbaden, 26 january 2017. * * * mr von weizsacker, ladies and gentlemen whenever a technical topic attracts as much media attention as blockchain technology has, it must mean it ’ s something special, especially considering the topic itself is not an easy one. it ’ s safe to say that there is much anticipation surrounding distributed ledger technology – some feelings of hope, some of fear. and the influence this technology is likely to have extends far beyond the financial sector. the deutsche bundesbank operates large financial market infrastructures and also develops these further in line with technological advances. for this reason, we need to be aware of the potential benefits and risks of this technology early on. together with deutsche borse, we have developed a preliminary prototype for blockchain - based settlement. this prototype has the following capabilities : settling payments based on blockchain technology, transferring securities, processing basic delivery - versus - payment transactions, where securities purchases are settled and paid for simultaneously, and processing basic corporate actions, such as coupon payments on bonds and redemptions of maturing securities. the aim of the project is to learn, step by step : how blockchain technology works, how secure and reliable blockchain - based transactions are, which factors affect the costs of blockchain - based transactions, how efficient and effective blockchain - based processes are, and how existing processes may be improved using blockchain technology. one of the key points here is increasing process efficiency. by using a shared data pool across all entities concerned, it should be possible to standardise and simplify some of the overly complicated transaction monitoring processes we have today. in addition, a shared data pool in combination with a flexible access rights concept would, for example, also establish the conditions in which the relevant regulatory reporting and internal audit requirements could be met with reduced effort and designed more securely. we opted for a concept based on a hyperledger blockchain. the most important considerations for us when designing the hyperledger - based prototype were : 1 / 2 bis central bankers'speeches having a closed – or “ permissioned blockchain ” – network