. when it comes to innovation, the americans have traditionally been focused on the opportunities, with a regulatory environment that's more flexible and conducive to business innovation. europeans tend to focus on the risks and call for regulation. but falling behind in adopting new innovations is a significant risk too, as all parts of the world should benefit from the productivity potential of ai. so i would call for a slightly more american attitude to things, and warn against stifling ai - driven innovation. that said, welcoming and fostering innovation doesn't relieve us of the obligation to monitor the risks that come with it. and that is my focus as chair of the fsb. this year, we are updating an fsb paper on the financial stability implications of artificial intelligence, originally published in 2017. while it's too early to say with certainty what our conclusions will be, the emerging consensus is that the risks identified in the earlier report are still there. the most important ones are concentration risk, third - party risks, possible increases in herding behaviour, and model risk, including challenges with regard to explainability. many of the potential risks of ai may seem new, but when you look beneath the surface, they are strikingly similar to traditional financial risks. risks that we are familiar with. we already have frameworks to assess concentration risk, third party dependence and interconnectedness. this is good news. but potential new forms of interconnectedness in the financial system may emerge. for example, autonomous trading agents may interact to create new dynamics in financial markets. some studies have found that ai - powered algorithms consistently learn to charge higher prices 2 / 3 bis - central bankers'speeches through collusive strategies, even if there's no direct communication between them. such interdependencies may be especially pronounced if the market for data and model providers is highly concentrated, which appears to be the case for generative ai models in particular. although there are lots of applications out there, in practice they all seem to be based on only a handful of models, perhaps just three or four. at this stage, the fsb's work is purely analytical. we are not currently developing policy options or coordinating across standard setting bodies or international organisations. but the fsb is ready to do what is needed to monitor these risks and implement effective regulatory frameworks. regulating a fast - changing, almost ubiquitous technology may sound daunting, but we have many good tools at our disposal.

dr. duisenberg discusses strategies for monetary policy in emu address by dr. w. f. duisenberg, president of the netherlands bank and of the bank for international settlements, on the occasion of the board meeting of the banking federation of the european union held in maastricht on 20 - 21 / 3 / 97. it is with great pleasure that i am addressing you on the european economic and monetary union here in maastricht today, the very location where that union was pieced together. it was here that we made a concerted effort some five years ago to lay the foundations for the economic and monetary stability of europe in the 21st century. since then we have been busily building on these foundations with the result that we now have the outlines of the european central bank. the framework for monetary policy contains three main elements : its primary objective, strategy and instruments. where the first is concerned, there can be no misunderstanding : the maastricht treaty prescribes that the overriding objective of ecb policy shall be price stability. knowing you all to be distinguished financial and monetary experts, i need hardly point out to you that to attain this objective, strategy must be transparent and credible. it is not for nothing that in recent months this issue has been figuring prominently on the agenda of the european monetary institute, the precursor of the ecb. let me give you a brief impression of the consultations held there. as soon as it has been decided in early 1998 which countries are to take part in emu, the ecb will decide what monetary strategy to pursue. generally speaking, there are two aspects to such a strategy : internal decision - making within the central bank and, equally important, the presentation of its measures to the outside world. in fact both aspects hinge on the question which variables should underlie the central banks interest rate policy and what weight should be assigned to each of these variables. after all, monetary policy is complicated by the fact that inflation reacts to the central bank ’ s interest rate decisions with long and varied lags. actual inflation rates are therefore not cut out to be a gauge of monetary conditions. the central bank should focus on information which provides insight into future inflation, and possibly formulate a number of intermediate objectives, the so - termed intermediate target variables : in europe today the money supply and the exchange rate often figure as such. the exchange rate in particular plays a major role in open economies, where inflation is due largely to external