and enjoy living standards comparable to those in neighbouring countries. this is our national ambition, and there is only one means of realising it. we must begin by fighting inflation in a positive way, and by trying to mitigate the corrosive effect it has on the economy and human life more broadly. " i would like to close by thanking unnur gunnarsdottir, deputy governor for financial supervision, for her invaluable work for the central bank since its merger with the financial supervisory authority in january 2020. in addition to thanking her for our time working together, i wish her all the best as she turns to the next phase of her career. i would also like to take this opportunity to thank katrin olafsdottir, who completed her tenure with the monetary policy committee in march 2022, andri fannar bergþorsson, who left the financial supervision committee last autumn, and gylfi zoega, who stepped down from the monetary policy committee this month, for their work on behalf of the central bank. at the same time, i welcome new monetary policy committee members herdis steingrimsdottir and asgerdur osk petursdottir and new financial supervision committee member gunnar thor petursson. 8 / 8 bis - central bankers'speeches

type of risk depends a great deal on the organisation of processes and on the business culture, and no model can easily convert these facts into quantitative requirements. there is therefore no alternative to using supervisory instruments to pursue further strengthening of the ability of banks to control and manage the relative risks. given the progress of technology and the ever - greater recourse to outsourcing, these risks are highly likely to increase in the near future. there is reflection at all levels on how to tackle them ; i doubt whether further tightening capital requirements would be the most 5 / 8 bis central bankers'speeches efficient response. 2. 3 changes to the committee ’ s modus operandi the way the committee operates and interacts with the market has also changed over time. as i have said, its participation base was broadened to include the big emerging economies. its activities became more transparent, and the market was afforded many opportunities for making comments while the basel iii rules were being drawn up. many consultation documents and impact studies have been published : for banks and supervisors alike, the quantitative impact studies have in fact become valuable tools for measuring the effects, intended or otherwise, of the proposed prudential rules. alongside the drawing up of standards, a considerable amount of the committee ’ s work now involves verifying their application, country by country, by means of peer reviews. this makes it possible to disseminate best practices and contributes to a more level playing field across different legal systems and banks, by limiting, for the latter, the margins for circumventing regulations and, for the former, the possibilities for using regulatory leverage to attract business and defend national flagship companies, as has happened in the past. there are, however, some drawbacks. the monitoring procedure, and specifically the fact that it includes attributing an overall final score ( to sovereign jurisdictions ), may give the false impression that the committee, which is simply a producer of technical standards and counts on voluntary participation, wishes de facto to impose its choices. it appears, in other words, to assume a role as global legislator on banking issues but with no mandate to do so. we have sometimes made the proposal, as yet unheeded, to use a grading system only for the assessment of technical aspects, individually considered, based on objective and quantitative evidence. this would increase the usefulness of peer reviews, making their technical and impartial nature clearer to everyone ( the public, political entities and the media ) and reducing the risk of