olli rehn : technological upheaval and labour markets opening remarks by mr olli rehn, governor of the bank of finland, at the bank of finland seminar on “ technological upheaval and labour markets ”, helsinki, 2 september 2019. * * * ladies and gentlemen, it is a great pleasure to welcome all of you to this seminar at the bank of finland. today we are addressing a very timely subject : technological upheaval and the labour markets. let me point out that this seminar has two parallel origins : popular demand and substantive importance. by popular demand i am referring to our seminar last december with trade unions and employers ’ associations, when these issues were raised in many interventions, calling for further research and dialogue on them – rightly so. so we are now responding to this welljustified popular demand. by substantive importance i am referring to the fact that these issues are indeed at the heart of the ongoing transformation of work and the labor markets. they have a profound impact on the everyday lives of our citizens – thus, what could more important than studying them? against this backdrop, let me outline a few questions i hope and trust that this seminar will be analyzing and even providing some answers. first of all, in recent years it seems that technological change has shifted gears. many of our daily activities have moved online, we are talking about the platform economy, while artificial intelligence and robotics seem to be on the minds and agendas of companies and policymakers. digitalization and automation have been around for decades, and there have been many waves of technological change that have caused disruptions in various industries and professions. nevertheless, it seems that there are some important differences between what has happened in the past and what is happening today. most importantly, it would appear that information technology is having a more widespread effect across all sectors of the economy. also, the ongoing process of digitalization may be affecting a larger share of jobs than the general purpose technologies of the past. this has also raised ‘ automation anxiety ’, with predictions that machines will displace jobs and cause mass unemployment. however, there is a long history of such predictions. let me give you a few examples. already 25 years ago, in 1995, american economic and social theorist jeremy rifkin warned “ now for the first time, human labor is being systematically eliminated from the production process. intelligent machines are replacing human beings in countless tasks, forcing millions of blue and white collar workers into unemployment, or worse still,

cross - border and interlinked risks – the truly systemic dimension of the risks. a holistic assessment of systemic risks to financial stability in the eu would also require a system - wide stress testing framework that would allow consistent analysis and assessment of vulnerabilities across the key sectors of the eu financial system. the stress testing framework would need to be complemented with other more qualitative sources of information, including market intelligence and expert judgement. to further develop its assessment of systemic risks in the eu, the esrb would need comprehensive and sufficiently granular eu - wide data covering both banks and nonbanks. in particular, improving data sharing between esas and the esrb would be necessary to assess interconnections between different entities and segments in the eu financial system. in addition to enhancing systemic risk analysis, the esrb will deepen its analysis of macro - financial vulnerabilities in eu member states and assess how macroprudential policy measures enhance the resilience of the financial system against identified risks. this kind of assessment of national macroprudential policy stances could feed into the eu's macroeconomic imbalance procedure. finally, it is essential to strengthen the esrb's communications on financial stability, systemic risks and macroprudential policies. even perfect systemic risk assessments would be of little value if they, and consequent policy conclusions, cannot be effectively communicated to the financial industry, other stakeholders and the general public. 5 / 6 bis - central bankers'speeches let me now conclude. financial stability fundamentally depends on the geopolitical and macroenonomic context. the best for eu financial stability at this juncture is to maintain european unity and firmly support ukraine in the face of russia's war. furthermore, it is crucial to strengthen the structural foundations of the european economy by focusing policy actions on productivity growth and industrial competitiveness, while retaining the european model of social inclusion. the esrb, together with the esas, the ecb, the national central banks and supervisory authorities, continues to play a key role in safeguarding the stability of the eu financial system. our work will focus on the evolving systemic risk and will be based on comprehensive data and research, high - quality analysis, and wide - ranging cooperation between authorities. today, i have outlined to you the main systemic risks that we have identified and are currently analysing and monitoring at the esrb. as i noted earlier, i would be most interested to hear your views