services. that has also allowed banks and other financial institutions to protect their workforces through work - from - home arrangements, and provided data analytics to raise red flags on networks of covid - 19 fraud accounts. at the hkma, we are committed to supporting innovation that works for all types of customers and for both small and large institutions. we also recognise that our regulatory framework needs to keep pace – focusing on outcomes, and being forward - looking. it is therefore not surprising to see that our fintech supervisory sandbox and chatroom have seen high levels of demand for early supervisory engagement on potential use cases. 7. second, public – private partnerships between law enforcement agencies, regulators and financial institutions exhibited a remarkable growth in the last three years, including in hong kong. that brought about clear improvements to our ability to identify and disrupt financial crime. let me give you some idea of the results that the partnership in hong kong is capable of delivering. since its launch in 2017, actions taken by banks through the fraud and money laundering intelligence taskforce ( fmlit ) have led to hk $ 692 million being restrained or confiscated – that is the proceeds of financial crime, investment scams, fraud 1 / 5 bis central bankers'speeches and other serious crimes. 8. and thirdly, there has been an increasing cultural change in the banks that we supervise – a move away from an overarching desire to simply “ tick the boxes ”. aml work is now increasingly viewed as more of a multi - dimensional activity, to which the understanding of risks – both current and future – is central and fundamental. there is a much broader acceptance that it is this understanding of the risks which then determines which tools to use, and which tools to develop for possible future use, in order to tackle new and emerging threats. using effective tools in turn helps focus our limited resources on the highest risks, and coordinate the public and private sectors to work together to achieve the best outcomes. 9. so all those three elements i spoke about three years ago have seen impressive progress, particularly with how the aml eco - system has responded to the challenges that covid - 19 has brought, across all sectors and all regions. perhaps it will also be helpful for me to refer to a few practical examples here. 10. first, on covid - 19 scams, those cases have had economic and social effects that are farreaching and often very nasty. much - needed funds have been diverted away from government efforts to contain

mimeo. countercyclical fiscal policy is based on fiscal rules that increase government spending in response to a negative output gap, and reduce it in response to a positive output gap. patient fiscal policy, in addition, keeps government spending at an elevated level, conditional on the short - term rate reaching the zero lower bound, even when the output gap closes. as such, this policy would have attempted to recover some of the previously accumulated output losses. 16. hazell, j. et al. ( 2020 ), op. cit. 17. measures of underlying inflation aim to filter out short - term volatility in headline inflation in order to capture the low - frequency component of inflation. such measures help central banks to distinguish in real time the “ signal ” on medium - term inflationary pressure contained in inflation data from the “ noise ” stemming from temporary or idiosyncratic factors. the measures of median inflation presented in chart 5 give an indication of how broad - based movements in inflation are. see ehrmann, m., ferrucci, g., lenza, m. and o ’ brien, d. ( 2018 ), “ measures of underlying inflation for the euro area ”, economic bulletin, issue 4, ecb. 18. second - round effects describe a situation where a temporary deviation of inflation from target becomes entrenched in wage and price - setting behaviour and then becomes persistent. 19. see the box entitled “ household saving ratio dynamics and implications for the euro area economic outlook ”, in ecb ( 2021 ), eurosystem staff macroeconomic projections for the euro area, june. 20. 0. 3 % in 2021 and 1. 3 % in 2022, beyond the measures already factored into the ecb ’ s baseline for our june projections. ex - post, i. e. factoring in the growth - enhancing impact of the extra investment spending, budgetary costs compared with the baseline would be 0. 9 % in total for 2021 and 2022. 21. panetta, f. ( 2021a ), op. cit.