a risk that they may delay tightening policy in response to rising inflation, resulting in reduced inflation control and an amplification of the business cycle. it is therefore essential that public debts are reduced from the very high levels they have reached in many countries. 3. 3 some current problems the current difficulties experienced in the euro area illustrate two further reasons why large fiscal imbalances are problematic for monetary policy. the financial crisis has led real economic activity to weaken severely. at the same time, the rapid increase in public debts and the attendant difficulties in financing them have forced governments in a number of countries to tighten fiscal policy sharply to improve debt trajectories, further weakening economic activity. 10 to offset the fall in demand, interest rates have been cut to almost zero in several countries. nevertheless, growth has not returned and some central banks have therefore adopted unconventional monetary policy measures, whose effectiveness is not yet fully established, to support economic activity. 11 needless to say, it would have been natural to use fiscal policy to expand economic activity but that is impossible for the simple reason that the debts are already too large. a further problem is when government debt becomes so large as to trigger perceptions of credit risk, the functioning of financial markets deteriorates. large government debts worsen the credit worthiness of banks and other holders of government debt. this causes money markets to function poorly, in particular since government debt serves as collateral for secured lending. furthermore, it raises interest rates in the economy more broadly and raises banks ’ funding costs. finally, it reduces the collateral base of banks, which impairs banks ’ access to central bank funding. these problems are evident in the euro area, where government debt levels and interest rates vary sharply between countries. the net effect is a weakening of the transmission of monetary policy and the creation of asymmetries across the monetary union. for this reason the ecb ’ s governing council adopted on september 6 a programme of outright monetary transactions to mitigate these adverse effects. 12 4. institutional limits debts and deficits since large public debts have highly adverse consequences for the economy, a number of institutional arrangements have been adopted to limit debt accumulation in the euro area and the european union more broadly. it is useful to distinguish between rules on deficits and temporary increases in inflation can arise from a wide variety of price level shocks such as increases in energy prices or exchange rate changes. while tighter fiscal policy can in theory be stimulatory, in practice it more likely that it

the risks, impacts and opportunities for the insurance industry arising from technology changes are a key focus both locally and internationally. eiopa 9 and the iais10 have held roundtables and issued papers on insurance technology ( insurtech ) and financial technology ( fintech ) firms. history is replete with examples of industries being transformed, created and disrupted by technology changes. this dates back centuries, but the pace of this change and the risks associated with it are increasing, in what seems like an exponential way. if one looks at the motor industry, some of the world ’ s largest technology companies and the world ’ s leading car manufacturers are all investing heavily in the development of autonomous systems that will change the very nature of driving, and, therefore, of motor insurance. in this context, it is noteworthy that motor insurance is the most important non - life line of business representing over 50 % of the non - life market in several eu member states. it is clear that change is coming. on this specific example, many questions arise, including : 4 / 7 bis central bankers'speeches who will be insured? who will own the data generated by these vehicles? how will the data be shared? can the owner of the data better understand the risk profile of the vehicle and be able to offer more tailored insurance? it is clear that insurtech not only raises question in relation to what is insured, but how it will be insured, and how the different channels, providers and products combined with changing customer demands will impact on existing insurance firms. future viability is dependent on answering these questions, and the successful adaption of business models to meet these challenges. as you will doubtless hear from other speakers, the exponential increase in the availability, collection, and interrogation of data is but one of these opportunities and challenges. again, using the motor insurance industry as an example, we can see a sharp increase in the use of telematics and data analysis to improve the understanding of drivers ’ behaviours. this provides an ability to track behaviour, better price for risk and actively incentivise the reduction in risky behaviours – so delivering positive impacts for road safety. this may reduce the number and the severity of claims, which would be of obvious benefit to all, and ultimately should result in lower premiums for policyholders. as the volume of data increases, firms must invest in a proper data governance framework. there are a host of challenges in collecting, analysing and understanding