factors alone cannot explain the very high figures we are observing today. core inflation is also on the rise, having reached 5. 0 percent in october. 1 / 3 bis - central bankers'speeches intuitively, both the slow recovery from supply chain bottlenecks and the extraordinary increases in energy prices have a negative impact on the real economy. so if they were the only drivers of the current high inflation, we would have seen a drop in production in the first half of the year. but we do not find this drop in the data, suggesting that demand factors must also play a role. the question is : which factors in particular? let me suggest a couple of candidates : the relaxation of covid restrictions and the fiscal policy of our governments. a fiscal policy that boosted demand in the aftermath of the pandemic, designed to counteract the negative effects of the lockdowns. a fiscal policy that is now being called upon to compensate our energy bills. that question - how much of the current inflation can be attributed to fiscal measures - is a topic of this morning's discussion. this interaction between monetary and fiscal policy is just one aspect of the complexity of the policy reaction to the current situation. because that's what it is : very complex. as i said : in economics, in monetary policy, there is never one answer. conducting monetary policy requires a deep understanding of the drivers of inflation. and that understanding is constantly tested by reality. by events. according to british prime minister harold mcmillan, this is the greatest challenge for a statesman. and the greatest challenge for an economist and a central banker. after the 1970s we enjoyed a long period of stable prices : inflation was under control and we thought we had that deep understanding of its drivers and dynamics. then the financial crisis challenged our confidence, followed by a period of persistently low inflation, and now we have been surprised again. by the persistence of inflation dynamics, and skyrocketing prices. price dynamics are more complex than we thought : events are wreaking havoc on our numbers, our models, our data. we see that the models we use in our analyses very often struggle to capture the persistence of inflation dynamics in a satisfactory way. is it possible that the economy is becoming more vulnerable to systemic shocks? are the after - effects of these shocks more persistent than we expected? do we underestimate the longer term impact of supply - driven shocks? it is obvious that the structure of the economy today is different than it

the fintech, and increasingly adopted by banks, consumers and merchants nowadays have a wide range of payment products to choose from. innovation developments, such as instant payments, payment initiation services, person - to - person mobile payments and contactless proximity payments have the digitization process accompanied by innovative solutions in their essence. the payment innovations and digitization process also have an impact on the transformation of payment market infrastructures. these developments, however, have raised various issues related to the requirements for bank openness, customer security, transparency and trust in the payment services market as well as consumer rights protection. consequently, the regulators have to adopt appropriate legislative framework that supports digitalization, innovation and competition, but also take care of security and protection. in this context, it can be noticed that the european union is a global leader in this domain. by revising the payment services directive ( psd2 ), the european union enables stronger competition and 1 / 3 bis central bankers'speeches innovation by allowing entrance of fintech payment service providers that will eventually lead to greater choice and better prices for consumers, it will fosters cyber resilience of the payment service providers as well as enhance protection of payment services users. in this way, the european union created a sound legal framework for digitalized payments landscape that enhances the integration of the single payment. at the same time, it sets an example for other countries around the world how to support digitalization trends by balancing between innovation and competition, on the one hand, and security and protection, on the other hand. the new regulatory framework implies that banks will no longer only be competing against banks, but everyone offering financial services, i. e. the customers will be able to create a set of providers of different financial services instead of relining on one bank for all services. the belief that nonbank fintech companies will play a significant role in the future financial landscape is well established if we look at investments in fintech industry. the cumulative investments globally have more than ten - doubled the last five years and are estimated to exceed $ 150bn the next 3 - 5 years. this, in addition to changed customer expectation and increased digitalisation, may be the reason why today we are witnessing a trend of stronger cooperation between banks and fintechs, including in the area of innovation labs. the new technologies, such as blockchain and distributed ledger technology, though young and still - evolving, show the potential of restructuring financial industry, even encouraging discussions for cashless society