Regrettably, fiscal developments have worsened recently in a few accession countries, reflecting ongoing restructuring programmes and higher expenditures related to the adoption of EU standards, but also the lack of a realistic medium-term fiscal strategy. In addition, structural deficits have become rather large and public debt ratios have started to increase, limiting the room for manoeuvre of automatic stabilisers. Overall, the need for further fiscal consolidation seems overwhelming, as fiscal slippages could put under pressure and even endanger the macroeconomic stabilisation achieved thus far. Finally, let me turn briefly to the third component of, or perhaps better complement to, stability-oriented policies in accession countries that I will be addressing today: the implementation of further structural reforms. Stability-oriented policies can best be supported by structural reforms, as they enhance the flexibility of the economy to adjust to necessary changes and cope with potential shocks. Moreover, structural reforms are also key determinants of the medium-term growth potential. In the case of the accession countries, structural reforms are even more important because they are necessary to complete the full adjustment of the accession countries' economies toward well-functioning market economies, including the setting-up of appropriate institutions and the adoption of international best practices in a number of areas. Completing this agenda is a challenge for the accession countries, particularly because of the sheer magnitude of pending reforms. Moreover, structural changes may complicate the conduct of monetary policy, as structural reforms may cause structural breaks that complicate the pursuit of credible disinflationary policies.

First, developments in finance have primarily been driven by the needs of society and the economy. The creation of banks, the stock market and finance as we know it today, reflect this. Secondly, as with other sectors of the economy, finance has synthesised considerably during periods of significant technological innovation. For instance, the pervasive use of smartphones in societal mainstream has enabled finance to reach a wider segment of society today than was ever conceivable in the past, making it possible for previously underserved segments of society to gain access to finance. As we ponder on the future of finance, and to start off the conversation, I would like to share five observations or themes that might possibly shape the development of finance in the future. Indeed, some are already beginning to take form in our market today. The first, finance will be democratised as we move forward. Technology is the catalyst. The great equaliser. This will open up a vast spectrum of possibilities for new entrants. Conventional wisdom holds that banking business is intricately tied to economies of scale. Size, scale and barriers to entry are thus traditional key determinants of competitiveness. This conventional wisdom or axiom is very much dated. In the future, competitive advantage will come from those who are able to harness the power of technology and be bold enough to venture into uncharted territories. The rules of the game have been reset, and more players are getting into the game.