9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Innovations in retail payments can transform checkout and ecommerce platforms can open new financing to SMEs. Innovation in, and greater connectivity across, wholesale payment systems have the potential to cut the costs of doing business across borders and unlock new trading opportunities. Intelligent use of big financial datasets could transform credit markets, closing the gap between financing opportunities available to small companies and those enjoyed by their larger competitors. Given their position at the heart of the financial system, central banks have a crucial role to play in supporting the development of this new finance, not least through creating the new infrastructure that it will require. 32  Monetary Policy’s Role in Managing the Transition As a former central banker, Whitaker would have recognised the importance of maintaining price stability during periods of large structural change. The appropriate setting of monetary policy will be influenced by the structural changes wrought by the Fourth Industrial Revolution, including in the labour market, by its impact on price dynamics and on the equilibrium rate of interest. To be clear, as these structural changes are real in nature, monetary policy cannot prevent them, and it would be unwise to attempt to accelerate them. For example, running the economy hotter is unlikely to be effective at increasing the rate at which workers displaced by technology can find new roles because it does not address the underlying frictions, particularly the lack of suitable skills.

Such targeting requires co-ordination between donors and must be in response to the real needs of a country. To this end we see it as imperative that there is effective follow up to the IMF’s FSAP missions to channel technical assistance to where it is most needed. It is also important for individual regulators in developed markets to contribute to capacity development elsewhere. The growing interconnectedness of the financial system means it is in our interests to do so. Sometimes bilateral links can be valuable, especially where the legal and regulatory systems are similar, in former colonies or territories perhaps. At the FSA we have a practice of receiving secondments from other regulators, which is valuable for us, and we hope for them. Perhaps more relevant for Singapore is ensuring that Emerging Markets’ concerns and experiences are heard. A thousand different voices can be lost in the clamour so it is important that objections are  6  BIS Review 25/2003  raised in an organised way, for example through regional organisations. Then the international committees themselves must ensure their consultation processes are meaningful and wide-ranging. Though this combination of adjusting committee structures, and membership, enhancing technical assistance and encouraging effective consultation we can ensure that regulatory standards are truly global and fit for purpose in countries at all stages of financial market development. Conclusion So to return, finally, to my introductory question – is the global regulatory system fit for purpose in the 21st century?