And a Smart Financial Centre needs smart regulation – that promotes innovation while safeguarding public confidence and financial stability. We are still learning and our approaches still evolving, but let me share with you three aspects of our regulatory response to FinTech. First, using a regulatory sandbox to test new ideas in a confined environment. Second, harnessing supervisory technology, or SupTech as we call it, to carry out supervision in a more efficient and effective manner. Third, strengthening cyber security across the financial industry to make it safer to use new technologies and instil confidence in consumers. Regulatory sandbox MAS launched a regulatory sandbox in June last year, to enable financial institutions and FinTech start-ups to conduct live experiments with innovative financial products or services. These firms do not need to fully meet the relevant regulatory requirements at the onset. To ensure that the consequences of any failure are contained, the experiments are conducted within agreed boundaries, such as the number of clients, scope of the activity, etc. The experiment is time-bound. If successful, the entity must exit the sandbox and fully comply with all relevant regulations if it wants to roll out the innovative product to the broader market. If the experiment fails, well we all learn something. Regulatory sandboxes not only encourage FinTech innovation by providing a safe space for 4/7  BIS central bankers' speeches  experimentation. They also give regulators an opportunity to learn the risks associated with new technologies and right-size regulation accordingly.

Frameworks are being established to identify and address the risks posed by global systemically important financial institutions. Make derivatives markets safer. Requirements are being put in place to foster central clearing, margin requirements, and mandatory reporting of OTC derivative trades. Transform shadow banking into resilient market-based finance. Oversight of shadow banking entities is being strengthened. The Financial Stability Board has been working to ensure that these internationally agreed regulatory reforms are implemented in a timely and consistent manner across the major jurisdictions. While gaps remain in some areas, implementation is generally proceeding well. It is time now to begin the important task of evaluating the impact of the reforms. In fact, the FSB is developing a conceptual framework for doing this. The framework aims to answer two questions: have the regulatory reforms been effective – are they achieving their intended outcomes? 1/7  BIS central bankers' speeches  what are the cumulative effects of the reforms – how have the various reforms interacted with one another, are they coherent, what are their larger social benefits and costs? This work is especially important in the current context: As memories of the crisis fade and the burden of regulatory reforms comes into sharper focus, the pressure to unwind the reforms will grow. It is important for the credibility of the reforms that their impact be objectively evaluated. It is also incumbent on us as regulators to be accountable for the substantial changes that we have put in place over the last eight years.