“Dual forces of globalisation and innovation are high on the research and policy agendas for financial regulators and central bankers”

Remarks by Governor Philip R. Lane at the European Financial Forum

• High level of interdependence between European and global financial systems, with an increasing role for emerging market investors and institutions in the global system.
• Critical that Central Banks operate with a shared understanding of global financial conditions, through information exchange.
• Innovation welcome but firms must be able to meet prudential and consumer protection regulatory expectations.

Governor of the Central Bank of Ireland, Philip Lane, today addressed the European Financial Forum at Dublin Castle. In his comments, he focused on the implications of globalisation and technological disruption on the financial sector.

He said that the expansion of emerging economies, both as an investment destination and as a source of funding for the advanced economies, as a central factor in many of the topics on the international financial agenda. These include the nature and number of international currencies; the design of international financial safety nets; and the operation and governance of global and regional official financial institutions, all of which highlight that the responses of global investors are central to the transmission mechanism for monetary policy operations. He said: “the high degree of interconnectedness across currency areas makes it imperative that central banks actively cooperate in the sharing of information and analysis, so that monetary policy decisions are based on a shared understanding of current macro-financial conditions”.

In relation to regulation, Governor Lane remarked that technological development in the financial services sector makes regulators more interested than ever in seeing evidence of prudent business management. He again emphasised the role of strengthening international cooperation, this time in order to be able to effectively regulate in a digital environment that may have little regard for national borders or jurisdictional reach.