are no longer so much under the bis central bankers ’ speeches influence of this phenomenon. the latest data on the increased saving in denars, compared to saving in euros, point to this conclusion. the expectation that the stable exchange rate level will be maintained simultaneously indicates that the difference between real interest rates in denars and real interest rates in euros continues to decrease gradually, certainly without any of them remaining on negative territory for a longer time. the national bank will continue not to hesitate to intervene in the foreign exchange market and increase the interest rate on the main instrument which represents an operational signal. through these policies the national bank confirms its capacity and institutional determination. market participants recognize this successful defense of the exchange rate in the past fifteen years, although in a short run any change may cause, through the transmission effects, only temporary increase of the nominal, and thus of real interest rates in the economy. a logical consequence of all this is that a possible reflation in the eurozone means that the republic of macedonia will not become an isolated island doomed to disinflation and, vice versa, that if the euro continues to prove effective in delivering low inflation in the eurozone, in the republic of macedonia internal depreciation will be the preferred course of adjustment. the differences between inflation rates in the republic of macedonia and the eurozone will remain temporary and limited. in fact, this marks the success of the stable exchange rate as an intermediate target of the monetary policy which consists of the aforementioned difference of 0. 2 percentage points between the inflation in the republic of macedonia and the inflation in the eurozone. in the long run, this enables economic agents to have more definite expectations about the general price level and denotes support to the economic environment. in such monetary policy setting it should be noted that the national bank, as a public institution, constantly needs to cooperate with the government without undermining the autonomy of any of these two institutions. from the perspective of the national bank, this means that the government is trying to anticipate the policies that we implement to maintain the level of the exchange rate and it takes them into consideration when adopting the budget. it is clear that the national bank and the government may adopt essentially good decisions in their respective spheres of action if they cooperate even during the discussions which precede the decisions. the cooperation with the government would also be in terms of creating conditions for the social dialogue to take into account the challenge we face in conducting the monetary policy. this actually means that the inflationary

on source data with limited history, even if in the age of big data, these data sets are broad in scope. expectations for banks recognizing that ai presents promise and pitfalls, as a banking regulator, the federal reserve is committed to supporting banks ’ efforts to develop and use ai responsibly to promote a safe, fair, and transparent financial services marketplace. as regulators, we are also exploring and understanding the use of ai and machine learning for supervisory purposes, and therefore, we too need to understand the different forms of explainability tools that are available and their implications. to ensure that society benefits from the application of ai to financial services, we must understand the potential benefits and risks, and make clear our expectations for how the risks can be managed effectively by banks. regulators must provide appropriate expectations and adjust those expectations as the use of ai in financial services and our understanding of its potential and risks evolve. 20 the federal reserve ’ s model risk management guidance ( sr 11 - 7 ) establishes an expectation that models used in banking are conceptually sound or “ fit for purpose. ” sr 11 - 7 instructs that when evaluating a model, supervised institutions should consider the “ [ t ] he design, theory, and logic underlying the model. ” the model risk management guidance discusses in detail the tools banks rely on to help establish the soundness of their models, such as back - testing and benchmarking and other outcomes - based tests. to that end, we are exploring whether additional supervisory clarity is needed to facilitate responsible adoption of ai. it is important that we hear from a wide range of stakeholders — including financial services firms, technology companies, consumer advocates, civil rights groups, merchants and other businesses, and the public. the federal reserve has been working with the other banking agencies on a possible interagency request for information on the risk management of ai applications in financial services. today ’ s symposium serves to introduce a period of seeking input and hearing feedback from a range of external stakeholders on this topic. it is appropriate to be starting with the academic community that has played a central role in developing and scrutinizing ai technologies. i look forward to hearing our distinguished speakers ’ insights on how banks and regulators should think about the opportunities and challenges posed by ai.