There is a school of thought that suggests the sole objective of central banks should be price stability. Accordingly many countries have adopted the inflation targeting approach in their conduct of monetary policy. Price Stability indeed is essential for sustained economic growth and there is no argument that it should be pursued. Moreover, the inflation targeting approach has the benefit of building up the credibility and commitment of a Central Bank. However, there is a risk that central banks may concentrate on achieving price stability as measured by a consumer price index, which may not necessarily guarantee economic and financial stability. With globalization and improvement in productivity, there has been a general tendency for inflation to remain relatively low. Though, price stability in terms of a consumer price index is achieved, there could be other imbalances arising from excessive demand pressure which may be reflected in assets price inflation and external payment imbalances. There could also be a danger of developing deflationary conditions which depresses growth. Therefore, it is important that central banks take into account other signs of economic imbalances in designing their policies, even though the sole objective may be defined as price stability. The Central bank of Sri Lanka has defined its key objective, not simply as price stability, but as economic and price stability. This is expected to prevent the Bank from trying to stabilize a price index rather than ensuring overall price stability in the economy.

Unprecedented demand, especially from developing countries, requires a rapid transition to secure and inclusive digital finance.1 The study points to a double digit increase in number and volume of fintech transactions, as well as  1/4  BIS - Central bankers' speeches  continuous increase of the client base. These trends have been underpinned by changes to the existing fintech products and launch of new ones. About 60% of the surveyed fintech companies reported launching new products as a response to changing behavior and demand of clients amidst pandemics. In addition, the fact that in the last decade banking industry was dealing with the legacy issues of the global financial crisis also provided bigger space for fintech firms, as non- regulated entities, to penetrate in financial business with consumer-centric solutions. This process was facilitated by the more favorable regulatory environment, i. e., falling regulatory barriers to entry for newcomers. Concerning the benefits, I think there is no doubt that Fintech can bring enormous benefits for customers, the financial system, and the overall economy. By enabling new players and business models to enter the market, Fintech has potential to increase competition, meet unfulfilled customer needs, reduce inefficiencies and transform financial services for good. These solutions come from Fintech's ability to unbundle traditional banking services such payments, maturity transformation, and risk sharing from banks, allowing these services to be performed by non-banks, i.e., fintech firms. Furthermore, fintech solutions can enhance data analysis, leading to more personalized products.