The general point is that we cannot reasonably expect markets to make a proper assessment of the risks of their investments, including particularly their short-term lending if they do not have adequate information in accessible form, so that we need to provide appropriate incentives for countries to provide such information. The corollary is that where they do have adequate information, financial market participants can be expected to accept the penalty if their judgements prove ill-founded - as indeed they largely do already in respect of many forms of overseas investment. The second condition for more stable capital flows is stronger financial systems. That includes for example the broadening of capital markets so that the allocation of capital is less concentrated on local banking systems. It includes robust financial infrastructure - for example payments and settlements systems. And it includes crucially more effective financial regulation and supervision. A key feature of future arrangements for me in this area is the encouragement, not just of more published information about the short-term foreign currency assets, relative to liabilities, of the public sector and the banking system, but more positive management of the country’s foreign currency liquidity position, taking account of the nature of the exchange rate regime. It was weaknesses in this area, above all, in my view that turned the Asian financial problem into a panic. These various steps - which need a great deal of elaboration and refinement - in themselves represent a huge agenda for the future.

The survey performed by the Financial Stability Institute on the use of innovative technology2 reveals that within data collection, supervisory agencies across the world use applications for supervisory reporting, data management and virtual assistance, while within data analytics, applications are used for market surveillance, misconduct analysis, as well as micro-prudential and macro-prudential supervision. To facilitate the contact with the industry, the National Bank has recently developed an Innovation Gateway, as a platform where firms can raise questions and get answers concerning the regulatory framework. The main purpose of the Gateway is to facilitate, encourage, and support innovation in financial services, by providing information to all firms willing to pursue innovative business activities. It provides a clearly visible interface to our website and offers an insight view on issues related to application of new innovative technologies. We are pleased that through this channel, launched a couple of weeks ago, we have already received several queries from fintech firms coming from EU member states as well as local fintech company that intends to offer new services in the payments area. Our internal expert group will interact with these entities to properly understand their business model, the benefits they bring, potential risks and asses how they fit in the current regulatory framework. One of the main priorities of the Hub in the following period will be to develop a Financial Services Digitization Strategy. The main goal of the Strategy will be to provide an enabling environment, including open and affordable access to core digital services and infrastructures.