is intended to follow the ball by means of a built - in ai – an ai that has been trained to identify the ball. during one live transmission, the camera was supposed to track developments on the pitch but kept focusing instead on one of the assistant referees. the ai had mistaken his head for the ball. apparently, the procedure had not been fed with enough data to allow it to learn the difference between a head and a ball. although this ml error did not lead to a flawed business decision, the spectators may well have seen more of the assistant referee than of the match … as humorous as this example may seem, it does illustrate a fundamental requirement for the application of machine learning methods : it shows just how important high - quality data are – whether on women ’ s and men ’ s voices or on balls and heads. ai and ml are only as intelligent as the data they are fed with. data quantity does not automatically translate to system quality. the dataset is the be - all and end - all for ai analyses. a deep understanding of the data used is crucial ; data competence has become the key competence in the financial sector! incidentally, palaeontologists also have to deal with incomplete datasets : although the brontosaurus is one of the best known dinosaurs, a skull has never been found. so the picture we have today of the brontosaurus is based on assumptions, meaning we can only make the educated guess that the sauropod had a short, high skull. such conclusions are arguably acceptable in palaeontology – i would rather not recommend them as a basis for a business policy decision, and would instead suggest looking for a better dataset. 3 supervisory approaches : a question of characteristics and explainability so how do the supervisory authorities view ml? first and foremost : pragmatically. we look at those elements that are risk - sensitive. we stick to our technology - neutral and risk - oriented approach. what we do not need is a definition of ml that is as universally applicable as possible, in which we may easily become entangled, and which may smother innovation or fail to cover every situation. instead, we are focusing our supervisory practices, inspection techniques and inspection intensity on which ml characteristics, if any, are present in a particular methodology and how pronounced they are. this approach – focused on individual characteristics rather than a rigid definition – helps us to identify ml innovations and the risks they pose, to address them appropriately, and to avoid lump

this, of course, we have sought to do. following the asian financial crisis we took a large number of measures to improve the functioning of the currency board, and the efficiency of the financial infrastructure in hong kong more broadly. we also continue to monitor and improve our system of banking supervision, in recognition of the fact that one reason we did ride out the asian financial crisis was undoubtedly that banks were strong. some observers have suggested throwing some sand in the wheels of international finance. by limiting capital flows, the argument goes, it becomes easier for central banks to maintain monetary and financial stability in turbulent times and to cope with the potency of international finance that comes with globalisation. indeed, control in one form or another has become quite popular in this region. but, for an international financial centre such as hong kong, whose main source of income stems from an ever - growing economic and financial integration with the rest of the world economy, such a policy is, to us, clearly undesirable. moreover, the basic law of hong kong also bars any foreign exchange control policies and any restrictions on the free flow of capital within, into and out of hong kong. others suggest that the hong kong economy would be better able to withstand economic shocks and disturbances if the currency board was adjusted or gave way to something else : different observers have different pet ideas and there seems to be no agreement on what that alternative would be. i have spoken a great many times on this topic and i do not propose to do so again today. let me just say that i remain convinced that the currency board has remained a fundamental source of stability for hong kong in the 239 months of its existence since it came into being in october 1983. what else can be done to ensure monetary and financial stability not just in hong kong, but also in this rather fragmented and diverse region, in terms of geography, size of markets, culture and stages of economic development? to my mind, much greater regional co - operation in the monetary and financial arenas should be on the policy agenda. such co - operation can take many forms, ranging from increasing and more open interactions between central banks in the asian region for the purpose of enhancing the stability, integrity, diversity and efficiency of financial intermediation in the region, and admittedly very much further down the road, to serious discussions of whether monetary integration and the establishment of an asian monetary union should be a goal. but to do that, we need to build stronger personal links between economists working on monetary