I am very pleased to close this Conference on “Economic and Financial Regulation in the Era of Big Data”. I was in London this morning and I therefore regret having missed your discussions on an issue which I consider of paramount importance. Let me thank warmly all speakers, in particular Benoit Coeuré, member of the Board of the ECB, who opened this Conference and Philip-Hans Franses, Professor at Eramus School of Economics, who I am told gave an outstanding lecture.
Big Data indeed deserves a global view, from a number of angles. It was the objective of this Conference and I am grateful to all of you, presenters and participants, to have made this possible.
In closing this Conference, I will not come back to the specificities of Big Data and its numerous usages. All presentations have given a fresh look on Big Data and I am sure that on such an excellent basis, discussions will continue beyond this one day Conference on issues which are of key importance for all of us.
I would rather like to focus on the consequences of Big Data for the economy in general and for central banks in particular. I will develop this into three parts:
I. Big Data will have significant economic effects. It will in particular change the relationships between the members of the financial community and between this community and the non-financial world
II. Regarding Big Data, central banks will have to switch from an observer status to a user or player position, which implies significant changes in performing part of their activities
III. Big Data raise regulatory issues that cannot be solved within a national context but require a global reflection from public authorities.
I. Big data will have significant economic effects. Entry costs for carrying out financial transactions have already been reduced and will be lowered further in the future. Customer knowledge, in particular regarding the conditions applied by financial institutions, will be enhanced and more generally information asymmetries between clients and providers of financial services will narrow. Big Data can be a powerful card to play by GAFAs or other native non-financial firms to develop new activities. The financial industry has therefore to adapt rapidly to face the data revolution and compete with the new entrants, while protecting privacy against increasing cyber risks in particular. All in all, competition will increase, which is beneficial to the economy. The flip side can be enhanced risks for financial stability, implying a new form of vigilance for central bankers in particular. I will elaborate a bit more on this later on.
II. Terabytes of data are available and more will be coming soon. Central banks will collect more and more granular data. This is a clear opportunity for better forecasting and even nowcasting. But to reap all the benefits, central banks have to be up to the technological challenge, which is huge. They have also to face a much larger competition in the new data Era, with a view to maintaining trust in public information. They have therefore to become Big Data players and not only observers. This requires significant efforts. Let me illustrate this in five avenues to adapt to the digital evolution.
Which brings me to my last point.
III. Big data raise issues that cannot be solved in a national context but require a public global reflection.
Very large worldwide corporates are hugely leveraging on Big Data. Public authorities have to forge answers to concerns that may arise on an international level. Which themes should be addressed? I would like to propose a few leads.
Let me thank you for your attention and wish you a pleasant weekend and for those who are not Parisians a pleasant journey back home... today or I hope for some of you on Sunday!