Indeed, the EU Treaty calls, as a prerequisite for adopting the euro, for a high degree of sustainable convergence in the fields of price stability, government fiscal position, stability of the exchange rate, and long-term interest-rate levels. The sustainability of nominal convergence itself presumes that sufficient preliminary progress has been made towards real and structural convergence (and namely having set a fully-fledged market economy, catching-up in income and productivity levels, as well as economic and social infrastructures, upgrading of the legal system…). Conversely, a sustainable catching-up process requires macroeconomic stability. Therefore, nominal and real convergence should be pursued in parallel, and are not antagonistic. •  Secondly, I noted that several accession countries have already expressed their intention to join ERM II rapidly after EU entry. This intention is to be welcomed, although it should be clear that ERM II membership needs neither to happen immediately after EU accession in all cases, nor to be limited to only two years, which is the minimum before adopting the euro. It would be totally misleading to consider ERM II as a mere “waiting room” before the euro. On the very contrary, ERM II membership allows countries to retain some limited exchange rate flexibility during the catching-up process and offers a meaningful, flexible and credible framework for increasing nominal and real convergence with the euro area, and for helping determine the appropriate level for the eventual irrevocable fixation of parities, in the best interest of candidate countries themselves.

Supervisory technology or SupTech The second aspect of our approach that I want to highlight is SupTech. Many of you are familiar with RegTech – the use of technology to enhance risk management and regulatory compliance in financial institutions. Well, why should regulated entities have a monopoly over the use of technology? Regulators too can harness technology to enhance the efficiency and effectiveness of supervision and surveillance. There is clearly greater scope for the use of analytics for financial surveillance and supervision: big data, machine learning, and perhaps even natural language processing. I believe securities regulators will increasingly harness big data to detect, enforce and prosecute misconduct. In a recent case, US SEC obtained a settlement against a broker-dealer for its failure to adequately train its representatives, when they were selling certain complex debt instruments. Custom analytics tools, instead of traditional investigative techniques, were used to sift through millions of trading records, which identified over 8,000 retail customers for whom the investment in the debt instruments was inappropriate. 5/7  BIS central bankers' speeches  In MAS, we have started using techniques such as clustering and network analysis in our supervision of the financial markets and monitoring of AML/CFT risks. We are developing algorithms to scan suspicious transaction reports (STRs) and identify those that warrant further attention, allowing supervisors to focus their resources on higherrisk transactions. We are working to develop algorithms that can detect and identify trading accounts suspected of syndicated activities.