Introduction

Good morning, good afternoon and good evening. Welcome to the 22nd International Conference of Banking Supervisors (ICBS). This is the second ICBS that we have held in virtual format, following the outbreak of Covid-19 in 2020. I am pleased to see that over 450 participants from about 90 jurisdictions are taking part in this year's event.

We have seen profound changes over just the past few years, and many more since the first ICBS in July 1979. The banking system is now much bigger and more interconnected. By one measure, total banking assets have grown by almost 4,000%. Foreign bank claims have more than doubled, now totalling almost $34 trillion, which is equivalent to more than a third of world GDP. Cross-border links between banks and other financial institutions now stand at $7.5 trillion. We have also endured more than 50 systemic banking crises during this period, a stark reminder of the critical importance of prudent regulation and robust supervision.

Despite these changes, the ICBS – which exists to promote supervisory cooperation within the international banking supervisory community – has stood the test of time. A common thread throughout the previous 21 conferences has been the commitment by central banks and supervisory authorities to collaborate and cooperate with the aim of strengthening the resilience of the global banking system and safeguarding financial stability.

Looking ahead, the need for global cooperation is perhaps more important than ever. We face a highly uncertain outlook, with no shortage of risks facing the global banking system. Stagflationary forces, rising interest rates, and high levels of public and private debt are keeping central banks and supervisors busy. Geopolitical developments continue to shape the economic trajectory. Major structural changes are shaping the future of banking system, including climate-related financial risks; the growth of non-bank financial intermediation; and perhaps one of the most significant – and the theme of this year's ICBS – the digitalisation of finance.

Indeed, we are seeing profound technological advancement and innovation. Since the first ICBS, the speed of the fastest supercomputer has risen exponentially from roughly 1 million to over 400 quadrillion computations per second today. Moore's Law is still delivering impressive improvements, with the number of transistors on microchips now exceeding 100 billion, a percentage increase of almost 4 million from 1979.

So it is fitting that we will be spending the next three days discussing financial technology and its implications for banks and banking supervision. What are the opportunities and challenges posed by new technologies for banks and supervisors? How should supervision adapt to digital innovation and the emergence of new services and business models? And, perhaps most existentially, what does it mean to be a "bank" in 2022?

I will not try to provide a definitive answer these all of these questions – we will benefit from the views of a wide and diverse range of speakers over the coming days. But let me provide a first approach to our debate during the next few days, I will focus my remarks on three broad financial stability implications resulting from the current wave of financial digitalisation, namely the impact on banks' business models, the risks from an ever-more pervasive use of digital services, and the emergence of new interconnections in the global financial system. All three observations, underline the critical importance of cooperation among central banks and supervisory authorities in overseeing the structural changes brought about by technological innovations, reaping their benefits, and mitigating the risks they pose to global financial stability.