francois villeroy de galhau : recovery and resolution of ccps opening speech by mr francois villeroy de galhau, governor of the bank of france, at the policy conference “ recovery and resolution of ccps ”, paris, 24 june 2016. * * * i will not comment now on the results of the british referendum. be only assured that we are mobilised and determined. france has already quite a long history with ccps. la caisse de liquidation, based in le havre, was the first to provide, in 1882, an insurance against counterparty risk on commodities markets. this history explains why we have a longstanding role as ccp overseer ; it gives us also a special interest and commitment to contribute to this policy issue, on which i would like to share a few thoughts. considering the growing importance for financial markets and financial stability of ccps, it is our collective responsibility shared among the financial industry and regulators - to maintain a robust network of ccps. as we strongly believe in the key role of ccps we must ensure that they never become the next “ too big to fail ” institutions. the growing importance of ccps is linked to regulatory changes, but not only. it is also linked to financial disintermediation and changes in the behaviour of market participants, which in both cases are most welcome evolutions. regulatory changes and the pittsburgh agenda have been obviously major factors contributing to the systemic importance of ccps. however, the clearing obligation for otc derivatives is not the end of the story. another potent factor is indeed the movement towards disintermediation, which should further amplify the role of ccps. this disintermediation trend is fostered by public initiatives, such as the capital markets union promoted by the european commission in the eu. this movement is also related to market initiatives, notably in our financial centre here in paris, to promote market financing as a complement for bank credit : for instance, the esni ( euro secured note issuer ) allows for the securitisation of high quality credit claims to improve sme financing. we also see a growing appetite of market participants for central clearing to further secure their transactions. repos are increasingly cleared in ccps in the eu, and this has stood as a key factor in the resilience of the european repo market over the latest years. however, with greater systemic importance come greater responsibilities. greater responsibilities lie first with the industry. the clearing industry

and anti - money laundering surveillance. 19. despite this promise of support, we recognise that banks, especially smaller ones, may still have doubts about going “ all in ” with fintech given the heavy talent and resource investments required. however, we are confident that by offering support that is targeted, specific to local market circumstances, and where it is needed, banks of all sizes will soon grow to appreciate the case for “ going ” fintech. the hkma looks forward to being a long - term partner with you on this journey, and i hope you can offer us your unwavering support too. 2 / 5 bis central bankers'speeches future - proofing hong kong for central bank digital currencies ( cbdcs ) 20. as we look beyond banks to the wider financial system, we turn our attention to initiatives that will have an impact on the financial system as a whole, one of which is cbdcs, the focus of our second strategy. 21. as the world becomes more interconnected than ever, cross - border and cross - boundary transactions have never been more frequent. many of us have witnessed how payment instruments have evolved over time, from banknotes to credit cards to cross - border payment networks. while cbdcs may not see mainstream adoption any time soon, this is something that has the potential to profoundly alter the global payment landscape. we must work with the industry and international community to ensure that we address both the technical and non - technical issues involved. 22. for this reason, we have been researching wholesale cbdcs as they have great potential in addressing the long - standing pain points in cross - border payments. lately, the hkma ’ s joint research with the bank of thailand has been ranked by the market as one of the most mature of its kind in the world ; a testimony that we stand at the forefront in the realm of wholesale cbdcs. we recently expanded the scale of the project to include more participating jurisdictions. 23. some of you may already be aware that the hkma has begun researching retail cbdcs ( rcbdcs ). we have been working with the bank for international settlements ( bis ) innovation hub hong kong centre on project aurum, which will focus on the technical aspect of issuing r - cbdcs and the possible architectural designs. 24. similar to the majority of central banks, we see that a lot of issues need to be thought through before issuing r - cbdc. for instance, how should we