However, this seems to reinforce their conviction that regional cooperation is necessary to achieve stable and non-inflationary growth and to overcome latent economic conflicts with their trading partners. As in the case of the regional process of integration in Europe, it may well be that the final objective of the Mercosur regional agreement goes beyond that of trade cooperation. The international community should support regional cooperation efforts among countries that have strong trade relationships and are willing to achieve progress in economic convergence. These efforts have significant positive externalities and could contribute to greater effectiveness of multilateral and bilateral surveillance. The exchange rate of the euro To complete the picture of the international role of the euro, let me finally refer to the exchange rate of the euro vis-à-vis other major currencies, namely the US dollar and the Japanese yen. I should like to take the opportunity to reaffirm that the ECB does not pursue any exchange rate target in its stability-oriented monetary policy strategy. Our objective is to maintain stable prices in the euro area and not a specific level of the euro’s exchange rate. According to our strategy, the exchange rate of the euro is the outcome of current and expected economic policies pursued in the euro area, and economic developments in both the euro area and abroad. Conclusions To summarise, the new institutional monetary setting in Europe has consequential implications for international capital markets and international policy cooperation.

1/3  BIS central bankers' speeches  To help us achieve this balance, we emulated the Financial Technology Regulatory Sandbox introduced in some other countries to provide an avenue for industry players to pilot or test new solutions within a safe space. Here, industry players have the opportunity to trial new financial technologies that support sustainable goals. At the same time, we are able to better understand and observe market impacts and tailor our regulatory and supervisory response accordingly. To date, 19 solutions have been tested in the sandbox. Of this, over 60% have been successfully rolled out into full-scale production. The Bank has also introduced new digital bank licences and implemented a series of changes to existing regulations applicable to agent banks, microinsurance, and payment and remittance services to enhance financial inclusion and consumer protection. Secondly, we continue to support a meaningful role of the financial sector in helping households and businesses meet transition challenges. While we are encouraged by a number of financial institutions in Malaysia that have announced net-zero or carbon neutral goals, it is imperative for financial institutions to do more to support transition. We expect this to gain momentum with the implementation of the Climate Change and Principle-based Taxonomy for financial institutions that was issued by Bank Negara Malaysia in April this year. By shining a light on climate risk mitigation and adaptation activities, the taxonomy will strengthen incentives for both financial institutions and businesses to adopt practices that are aligned to climate goals.