00:02I'm joined now by Valérie Fasquell, Deputy CIO at Banque de France.
00:10Welcome to the programme.
00:11Thank you, good morning.
00:13So, you're a federal system formed by the European Central Bank
00:17and the central banks of the euro area,
00:19which is responsible for implementing monetary policy,
00:21ensuring financial stability, regulating the banking sector,
00:25and providing economic and financial expertise.
00:28So, by embracing innovation and technological advancements,
00:32your bank explores digital solutions and promotes financial transformation.
00:36So, welcome.
00:37As Banque de France's sponsor for innovation,
00:40how do you see your innovation programme and approach contributing to the overall mission?
00:46I think what is really obvious is that innovation is profoundly transforming finance.
00:53So, it's obviously a topic of interest for a central bank
00:57and innovation is really part of our DNA.
01:01So, innovation and central bankers is a kind of oxymoron to a certain extent.
01:08So, we have two important aspects to look at.
01:13First, we are anchors and catalysts.
01:16Anchors, it means that you mentioned it in our mission.
01:21One element is to promote and to ensure financial stability.
01:26So, we have to make sure that innovation is a way to build confidence.
01:32And that's our role of regulator.
01:34But we are also catalysts in this transformation of finance.
01:38So, we very much promote innovation and we are ourselves playing an active role in innovation.
01:46In particular, looking at our experiments on central bank digital currency.
01:51Absolutely.
01:52In 2017, you established the lab, which was your own in-house innovation centre.
01:57What exactly was the purpose of this?
01:59How does it work toward responding to the latest technological changes
02:02and also the customer behaviour in today's digital world?
02:07So, our lab is really an entity helping the business units and the ecosystem in thinking out of the box.
02:15So, we are there to federate all the innovation capabilities of the bank
02:22to stimulate innovation, to make and create a push towards innovation.
02:27So, that's for the business units because we need to transform ourselves
02:32and that's the reason why innovation is also important internally.
02:36And we are also playing in this field with the rest of the ecosystem,
02:41of the financial system with banks, fintechs, startups, etc.
02:47So, the lab is also there to push, to trigger and to make this link between innovation internally
02:56and outside of the walls of Banque de France.
03:00Payments and market infrastructure are areas which have been deeply transformed because of innovation.
03:06What are some of the key challenges and opportunities in this area?
03:10So, I think that there are three elements to be kept in mind.
03:15The first one is that we have new actors in finance
03:18and actors which are not necessarily regulated like other entities
03:25because we are in a very bank-oriented ecosystem in France.
03:30The second element is that we see new settlement assets, stable coins, crypto assets and so on
03:37versus the mainstream traditional finance which is based on commercial bank money and central bank money.
03:45And we have a third trend which is the emergence of decentralized infrastructures
03:52versus a current world which is mainly centralized.
03:56So, when we put all together these three elements, we see that these are trends transforming finance.
04:04So, for us, there are two big questions, our central bankers.
04:08The first one is how to create and to organize the interplay between this new world
04:14and the mainstream financial system.
04:18That's the purpose of regulation.
04:20Same activities, same risk, same regulation.
04:24And the second big question is that in this new world, so it's DeFi and so on,
04:31what could be the role of central bank to keep on creating confidence,
04:37notably with the central bank money?
04:39So, this is a way for us to revisit the conditions in which we give the access to central bank
04:47money
04:47and that's notably our reflection on central bank digital currency.
04:52How do you measure the success and impact of your innovation initiatives?
04:56Because, you know, are there specific metrics or indicators that are used to evaluate the benefits of such program?
05:02So, the first thing is that innovation is steered at a very high level at Banque de France.
05:08The governor, François Villerois de Gallo, is managing himself the progress of the work.
05:14So, we have a strategic committee and we put the focus on two indicators.
05:20The first one is how many innovative projects do we carry on with the ecosystem?
05:27And the second indicator is how many experiments go live within the bank in a period less than six months.
05:37These are basically the two key indicators we look at.
05:41Wonderful. Well, thank you so much for joining.
05:43We're excited to see you here at Viva Tech and we'll see you on the main floor.
05:48Thank you very much. Have a nice day.
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