developments in the economy and provide projections for inflation and economic activity. reasons for transparency why is increased transparency viewed as such an important issue? the primary task of central banks is to get monetary policy right - that is, to pursue policies that effectively promote the objectives established by their legislatures or parliaments, such as stable prices, full employment, and maximum sustainable growth. communicating what the central bank is doing, and why it is doing it, is of secondary importance to getting it right. nonetheless, transparency is important, and even valuable, for two reasons. transparency, independence, and accountability first, over recent decades it has become increasingly clear that central banks need to have a considerable degree of independence to carry out their jobs effectively. of course, central banks are part of their governments, ideally subject to a well - defined legal framework. but there is now a broad consensus that central banks should be able to apply their own professional judgment in setting their operational instrument, usually a short - term interest rate. to be sure, this independence does not refer to the goals of monetary policy. in a democracy, it is appropriate that the central bank's ultimate goals should reflect the common good and, in that spirit, should be set by voters'representatives. rather, independence applies to the instrument settings and other policy choices made by the central bank to achieve the ultimate policy goals. the main reason that central banks need to be independent in using their instruments is that effective monetary policy requires a distant time horizon. the monetary policy most appropriate for long - run stability and growth of an economy may not be politically popular in the short run. but along with a high degree of independence, central banks are required to account for their decisions in various ways. this, too, is appropriate in a democracy : the public has a right to know what its unelected, as well as elected, officials are doing, and why. and this is the reason that transparency is so important for supporting the independence of the central bank. transparency facilitates a broad understanding of what the central bank is doing and thereby gives the public the tools to hold the independent central bank accountable. transparency, in fact, can play a valuable role in reinforcing the institutional independence of a central bank. history has shown that, even with the best intentions and safeguards, the independence of a central bank can come under strain when the appropriate long - run policy is unpopular in the short run. the clarity transparency brings to the objectives and strategy of policy can greatly help a

as a result, we are committed to regularly engage with firms and the technology to develop a shared understanding of these issues as they evolve. fundamentally, financial institutions themselves are responsible for providing innovative financial services safely. financial services firms must pair technological know - how and innovative services with a strong compliance culture and a thorough knowledge of the important legal and compliance guardrails. while “ run fast and break things ” may be a popular mantra in the technology space, it is ill - suited to an arena that depends on trust and confidence. new entrants need to understand that the financial arena is a carefully regulated space with a compelling rationale underlying the various rules at play, even if these are likely to evolve over time. there is more at stake in the realm of financial services than in some other areas of technological innovation. there are more serious and lasting consequences for a consumer who gets, for instance, an unsustainable loan on his or her smartphone than for a consumer who downloads the wrong movie or listens to a bad podcast. at the same time, regulators may need to revisit processes designed for a brick - and - mortar world when approaching digital finance. to ensure that fintech realizes its positive potential, regulators and firms alike should take a long view, with thoughtful engagement on both sides. when we look back at times of financial crisis or missteps, we frequently find that a key cause was elevating short - term profitability over long - term sustainability and consumer welfare. it was not long ago that so - called exotic mortgages originally designed for niche borrowers became increasingly marketed to low - and moderate - income borrowers who could not sustain them, ultimately with disastrous results. in addition to the financial consequences for individual consumers, the drive for unsustainable profit can contribute to distrust in the financial system, which is detrimental to the broader economy. it is critical that firms providing financial services consider the long - term social benefit of the products and services they offer. concerns regarding long - term sustainability are magnified in situations where banks may bear credit or other longerterm operational risks related to products delivered by a fintech firm. one useful question to ask is whether a product ’ s success depends on consumers making ill - informed choices ; if so, or if the product otherwise fails to provide sufficient value to consumers, it is not going to be seen as responsible and may not prove sustainable over time. the key challenge for regulatory agencies is to create the right balance. ultimately