Ravi Menon: Foundational infrastructures for an inclusive digital economy Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Launch of Report on Foundational Digital Infrastructures, 26 April 2021. * * * The rapid adoption of digital solutions has enhanced the economic and social well-being of millions of people around the world. But many of these solutions are not interoperable. Digital transactions are not seamless and we are not able to exploit the full efficiency benefits of digitalisation. It also means that the digital economy is not as inclusive as it should be. To create a truly efficient and inclusive digital economy, digitalisation must be end-toend. Digital innovation is not just about the number of patents or the sophistication of the algorithms. We must put people at the heart of innovation, by creating end-to-end digital solutions that will purposefully improve their lives. We need foundational digital infrastructures – systems that allow different users, different solutions, and different devices to seamlessly interact with one another. Foundational digital infrastructures will enable interoperable solutions and seamless digital services to reach more people and businesses, at lower cost and greater convenience. They will enable more pervasive digitalisation within and across economies. Just as physical infrastructures like railroads helped to advance the industrial economy, digital infrastructures will spur the growth of the digital economy. The public and private sectors must come together to co-create common digital infrastructures, and avoid the pitfalls of isolated technology solutions - ‘digital islands’ and ‘walled gardens’.

Macroprudential policy for the banking sector cannot suffice to contain the systemic risks 8  See Martínez Miera and Vegas (2021). 18  threatening financial stability if such policy omits the other financial sectors. Indeed, the introduction of new requirements in one part of the financial sector may inevitably induce a shift in or migration of risks to other sectors of the financial system, because the latter are less regulated or simply subject to looser regulation. It is thus vital to also have a macroprudential framework that can reach all segments of the financial system. To date, however, macroprudential policy has been largely confined to the credit institutions sector. Thanks to the work of the BCBS and to the regulatory commitments of the key European institutions and national authorities, it has been possible to develop a macroprudential framework on the basis of microprudential capital requirements. In other financial sectors, by virtue of their activity and the characteristics of the agents operating in them, it would be necessary to develop a specific typology of instruments that act to the benefit of financial stability and fit, in turn, into the general prudential and regulatory framework prevailing in such sectors. Thank you. 19  References Adrian, T., N. Boyarchenko and D. Giannone (2019). “Vulnerable Growth”, American Economic Review, vol. 109, no. 4, pp. 1263-1289. AMCESFI (2020). Annual Report 2019. Anguren, R., L. Gutiérrez de Rozas, E. Palomeque and Carlos J. Rodríguez García (2020). “The regulatory and supervisory response to the COVID-19 crisis”, Financial Stability Review, no.