ECB’s Knot: Within Guardrails, Should Be Room for Financial Innovation

23 April 2025

ECB’s Knot: Within Guardrails, Should Be Room for Financial Innovation
Klaas Knot, governor of De Nederlandsche Bank, at the ECB International Women’s Day 2025 event in Frankfurt on March 7, 2025. Photo by Angela Morant/ECB under CC BY-NC-ND 2.0.

By David Barwick – WASHINGTON (Econostream) – European Central Bank Governing Council member Klaas Knot on Tuesday said that financial innovation should be possible within the necessary constraints imposed by authorities.

Speaking on a panel at the IMF that made no mention of monetary policy, Knot, who heads De Nederlandsche Bank, said, ‘Our motto in dealing with digital innovation has always been that we want to harness the benefits while mitigating the risk.’

‘Many of the risks are not all that different from traditional risks that we see in the financial system … they just manifest themselves in a different way than traditional products do’, he said.

Authorities had to ensure that there were ‘guardrails’ to limit the materialization of risks, he said.

‘Within these guardrails there should be room for financial innovation’, he said.