The focus of this Symposium – on insights, inclusion and innovation – underpins this adaptability. Insights – identifying with microentreprenurs As effective policymakers and practitioners, we need to have deep insights of our clients on-theground: the microentrepreneurs. This obligation begins with the awareness that the needs, tradeoffs and circumstances of microentrepreneurs are unique. They face very different financial constraints and in turn, very different choice sets. Hence, effective microfinance design that appeals to microentrepreneurs’ needs will not only require a rooted understanding of whether they have been good paymasters, who their other financiers are and how they conduct business; 1/3  BIS central bankers' speeches  but also their specific background, problems and values. As we speak, predictive credit analytics are being developed using alternative data, such as psychometric assessments and other non-financial information. This may be particularly useful in the microsegment, where traditional data on creditworthiness are usually scarce. These insights can also be leveraged to design products that are tailored towards the distinct needs of microentrepreneurs. Improving user experience and confidence is equally important. Application procedures, user interfaces and operational processes should be simple and seamless. Most importantly, they should be appropriate to the circumstances of microborrowers for whom a loan may well be the first experience with a formal financial institution. How they perceive this experience can have longer term effects on the level of trust they place in financial institutions, and reinforce behaviours that will either encourage them to use financial services, or further distance them from the formal financial system.

However, it increases the difference in treatment between repo transactions with central banks and interbank repo transactions not backed by level 1 HQLA. 13  See Stein (2013, op. cit.). BIS central bankers’ speeches  5  pricing of the CLF should therefore strike the right balance to protect monetary policy without undermining the effectiveness of the LCR as a prudential instrument. On the one hand, in order to reduce pressure on demand for central bank funding, it is necessary that banks find it more attractive to pay the CLF commitment fee rather than to obtain central bank liquidity and leave it on their accounts at the central bank. A CLF that would only be used in stressed times would not serve our purpose. On the other hand, there is a danger perceived by some that a CLF could materially change the effectiveness of the LCR, as the definition of HQLA would de facto be substantially widened, which would offset the objective that banks should self-insure against liquidity risk. To avoid such an outcome, the following remedies exist: first, the pricing of the CLF in normal times should reflect the opportunity cost of a bank for holding HQLA rather than non-HQLA. As a result, reliance on the CLF should not be more attractive than holding private-market HQLA. Second, it has to be borne in mind that access to the CLF needs to be collateralised; hence collateral availability puts a “natural” limit to accessing HQLA in the form of a CLF.