The financial system must always be in a state of readiness to identify and effectively prevent any emerging risk of terrorism financing. 1/3  BIS central bankers' speeches  Let me suggest a three-pronged strategy to erect stronger defences within the financial system. This will include capitalising on technology, promoting clever partnership between the authorities and industry, and closer international cooperation. Capitalising on technology While technological misuse poses a danger to society’s wellbeing, technology is also an effective tool to counter terrorism financing. Akin to using a diamond to cut a diamond, we must harness the vast potential in technological innovations to reinvent and reinforce our lines of defence. A rule-based system, which is at the core of many of such preventive programmes today is becoming increasingly ineffective. The reliance on automated systems to monitor and detect suspicious transactions have served us well, but as we move forward, we need to do more. We need new tools. The adoption of artificial intelligence, machine learning, and big data technology are tools that would likely be imperative, as suspicious transactions become more complex and harder to detect. As we learned from the Innovation Forum at this Summit, the use of artificial intelligence and big data will have the potential to increase efficiency and accuracy of assessments that is essential in a dynamic environment. The banking sector needs to adopt the latest and most advanced technologies to improve its risk management framework. We need to prepare ourselves, as according to many pundits, digital currencies will become the new norm.

I am confident that the ECB is well equipped to cope with this challenge, not least due to the "full information approach" chosen in the form of the two-pillar-strategy. Of course, not only central bankers face uncertainty, but also private agents. Given this situation, the central bank itself must be an even greater source of stability. It must not only avoid any actions which may bring uncertainty to the economy, but must try to stabilise the expectations of private agents. When private agents are uncertain about the objective and the commitment of the central bank to this objective, they tend to shorten their planning horizons. They therefore become less predictable, which ultimately leads to a less foreseeable economic environment. BIS Review 10/2001  3  Thus, it is crucial for a central bank to define its policy objective and its strategy clearly and to provide a stable and broadly predictable pattern of behaviour to the public. In addition, central banks should avoid pursuing an activist monetary policy, i.e. they should avoid attempts to fine-tune the economy. In general, the limited knowledge of the monetary transmission process favours a clear medium-term orientation in order to accurately assess the risks to price stability. The current monetary and economic situation in the euro area Let me finally turn to the current monetary and economic situation and its implications for monetary policy. As you are no doubt aware, the ECB has kept interest rates unchanged since the beginning of October last year.