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With respect to the former, he discusses the relevance of achieving a timely and adequate implementation of the post-crisis reforms, with an emphasis on the role that proportionality could play in dealing with some of the challenges that may arise in this implementation process. As for the emerging risks, he elaborates on the potential disruption that innovative technologies may cause in the financial system landscape and how to go about regulating them in order to maximise their benefits and to minimise their risks.
He stresses how regulation should respond to both the old sources of risks that triggered the financial crisis and the new risks emerging from technological developments. In the first case, the focus should be on adequate implementation of the new international standards. In the second case, the objective should be a proportionate response to the adverse implications of innovation, following a holistic approach and seeking, when relevant, international cooperation. Swift action in both domains seems essential, in particular to ensure that the financial system keeps the strength required to face, in particular, the challenges posed by the remaining vulnerabilities in the macro-financial environment.
However, in order to maximise its benefits, regulatory action should be accompanied by a strong supervisory framework. That requires supervisors with a solid institutional charter including effective independence from governments and powers to act swiftly and in a timely way. This is still a challenge in a number of jurisdictions around the globe, including several in Latin America.
But beyond improving the institutional issues, there is a need for supervisory authorities to ensure sufficient capacity to address the oversight of the new, more numerous and more sophisticated regulatory requirements and the new risks associated with the disruptive effects of technology. In addition, supervisors need to embrace the new technologies that could help them strengthen their own oversight methods and procedures. That implies that supervisory agencies should be able to attract and retain talent, but also that they should intensify their capacity-building activities and their interaction with other foreign supervisory agencies to share experiences.
BIS aims at contributing directly to the required capacity-building effort through its own Financial Stability Institute (FSI). The FSI is mandated to assist central banks and supervisory authorities worldwide in strengthening their financial systems through the timely and adequate implementation of international regulatory standards and the adoption of sound supervisory practices. Through its policy implementation work, training activities and outreach events - such as this High-level Meeting - the FSI facilitates the exchange of supervisory experiences and approaches. No doubt the FSI mission becomes particularly relevant in the new regulatory and technological environment.