The dose will depend on the initial conditions of the economy and the magnitude of the shock. A simple example is dealing with uncertainty in financial markets that increases demand for liquidity, which requires the provision of liquidity by the central bank. Is this consistent with price stability? Yes, indeed. If the financial shock consists of a collapse in asset prices that weakens balance sheets and leads to further declines in asset prices, the economic contraction can be substantial. The monetary policy response in this case will be to reduce interest rates, consistently with price stability (as in Bernanke and Gertler, 1999). In the aforementioned cases, policy interventions under financial stress, either lender of last resort (liquidity injections) or interest rate types, are consistent with PS and FS. But it may be the case that the magnitude of the financial shock is so severe than neither price nor financial stability may be fulfilled. The problem is not that these two objectives are mutually inconsistent, but that the shock is too large to be addressed with the standard tools. Nevertheless, the fact that the targets may not be achieved within the “policy horizon” does not mean that monetary policy cannot be effective to reduce the costs of the crisis. If something, output costs associated to the global financial crisis have been, so far, significantly lower than the ones we observed in previous comparable episodes. Macroeconomic policy has a lot to do with this.

Ong Chong Tee: Technological innovation and supervision of financial institutions Keynote speech by Mr Ong Chong Tee, Deputy Managing Director (Financial Supervision) of the Monetary Authority of Singapore, at the Asia Securities Industry &amp; Financial Markets Association (ASIFMA) Annual Conference 2018, Singapore, 1 November 2018. * * * Mr Mark Austen, CEO ASIFMA, Distinguished guests, Ladies and gentlemen, 1  Good morning. Thank you for inviting me to join you at this 2018 ASIFMA Annual Conference. Post-crisis Regulatory Reforms 2 It has been ten years since the Global Financial Crisis. Many of you will be familiar with the post-crisis reforms to make the financial system more stable and resilient, such as on the quality and quantity of banking regulatory capital and the enhanced liquidity requirements. A minimum leverage ratio has also been introduced as a “back-stop” to complement the risk-weighted capital requirements. The Financial Stability Board also led various work to address “too-big-to-fail” concerns, and Global Systemically Important Banks (G-SIBs) are now subject to higher capital, more intense supervision and resolution planning requirements. 3 In the capital markets, we have also seen important regulatory developments. Take for example, the work of the G20 OTC derivatives reforms. Almost all the G20 jurisdictions as well as key financial centres such as Singapore and Hong Kong have or are putting in place their regulatory frameworks for trade reporting, central clearing and platform trading. These will be supplemented by new margin requirements for non-centrally cleared OTC derivatives and extension of regulations to all derivatives markets intermediaries.