frameworks, anchored inflation expectations and further developed local currency sovereign debt markets. this enabled them to step into terra incognito with asset purchases when the crisis hit. such experience confirms that strong fundamentals constitute the first line of defence for eme central banks against potential shocks. as the emerging market sell - off in 2018 or the 2013 taper tantrum tells us, capital flows to emes are vulnerable to advanced economy central bank policy movements, particularly by the us fed. therefore, now is the time for emes to further strengthen their monetary policy frameworks – and build on their hard - won monetary policy independence. international institutions, such as the imf, are there to assist countries through programmes or capacity - development. imf programmes for emerging markets often stress the need to safeguard central bank independence and strengthen monetary policy frameworks, which can substantially support emes under stress. moving forward, we can see the contours of what needs to be done to prepare for the postpandemic economy. but this brave new world may look different than we currently imagine. some have suggested that we are entering uncharted waters, which may require novel ideas and bold action. i thus hope that we can return to this topic and continue our dialogue. meanwhile, i wish you an enlightening and enjoyable conference. 3 / 3 bis central bankers'speeches

be worth nearly usd 900 billion – growing by around 50 % annually. an impressive trend, indicating the scale of opportunities that alternative funding sources hold. second, fintech may help increase financial inclusion. world bank data shows that around 40 % of the global population still do not have access to the formal financial system. at the same time we have got remarkable examples proving that technological innovations allow underbanked societies to skip the step of conventional banking expansion and move directly to the latest financial instruments, such as instant mobile payments. and third, by digitalising the financial system, fintech limits space for the ‘ shadow economy ’. due to increased transparency, digitalisation allows authorities to curb illegal economic activities more effectively. with the amount of money laundered globally, ranging from usd 800 billion to usd 2 trillion on an annual basis, financial innovations can offer substantial gains. 1 / 4 bis central bankers'speeches i could go on about the benefits that fintech brings, but … i suppose there is no need to prove the obvious, so let us now move to the challenges. fintech calls for increased flexibility financial innovations alter the way the whole financial system functions. while providing better quality and more efficient services, fintech challenges the operative models of established financial institutions. in fact, more than 80 % of actors on the global market believe that their businesses are at risk due to competition from innovators. this suggests that the traditional players either have to change, or face a risk to be pushed out of the market. on top of this, fintech renders some of the long - standing regulatory practices ineffective. this means that regulators need to become more flexible. if they do not, they risk not fitting through the doors opened up by new technologies. to put it bluntly, without adapting to rapidly changing financial developments, regulators may find themselves sidelined and unable to meet expectations. more and more authorities across the world seem to be realising this. back in 2016, the uk financial conduct authority was the first in the world to set up a ‘ regulatory sandbox ’. in essence, it functions as a ‘ playground ’ for testing novel instruments before they reach the market. this is done under the guidance of the regulator, allowing it to keep up with market developments and build the necessary know - how. in other words, such formats serve two purposes. first, they allow innovative start - ups to test their ideas and grasp the regulatory requirements. second, ‘ sandboxes ’ enable regulators to upgrade their tool