The deviations enter the loss function quadratically. Large deviations from the targets are thereby deemed to be a considerably more serious disadvantage than small deviations. In the event of large deviations between inflation and the inflation target, or substantial imbalances in the real economy, the use of relatively strong measures may be appropriate. The trade-off between inflation stability around the inflation target and stable growth in output is expressed by parameter . The higher is, the greater the emphasis on real economic stability in relation to stability in inflation. With a is the definition strict inflation target, i.e. emphasis is only placed on inflation, is equal to zero. of flexible inflation targeting. Although the loss function has two add factors, both of which are given emphasis, a fundamental difference is that the monetary policy authorities can choose the inflation target but not the level of potential output. In practice, no central bank uses a loss function of this kind directly. What inflation-targeting central banks do in practice does, however, contain elements of the thinking behind this theory. 6  See the box “Flexible inflation targeting and indicators of pressure in the real economy” in Inflation Report 3/03, p. 46, for a more detailed description of the different indicators. 7  See for example Svensson, Lars E. O. (2002): “Monetary Policy and Real Stabilization”, in Rethinking Stabilization Policy, A Symposium Sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 29-31, 2002, pages 261-312.

Emergence of faster-pay infrastructures and mobile financial services within our region like the FAST payment and Wing in Cambodia, Wave Money in Myanmar, or PromptPay here in Thailand have helped reduce the cost of financial services for financial institutions and the public at large. For Thailand, the PromptPay infrastructure has helped cut down cost of retail fund transfer so much so that most financial institutions now offer online transfers free-of-charge. These infrastructures are critical foundations for which new add-on services can be built upon to support growing e-commerce activities in our region. b. In addition, we have seen firms experimenting with using alternative online data and machine learning for credit scoring model. A credit 2/5  scoring model created from data of payment receipts should help financial institutions better assess credit risks while ensure that borrowers, especially small enterprises, gain funding at a fair price. c. Another initiative undergoing testing here in Thailand is the use of blockchain for cross-border financial transactions. This technology should make cross-border payments more secure, more efficient, and more affordable to businesses and a larger population in the near future. Ladies and gentlemen, All of these are just some examples of the developments happening in our financial landscape. What is more important is that we must recognize that financial technology is a powerful tool for us to improve on productivity, immunity, and inclusivity. Efficiency in financial services is enhanced, as new payment ecosystem can enable more efficient transfer of funds and significantly lower transactions costs for consumers.