rate partly reflects expectations of a rise in central bank interest rates, beside which the scope of the east iceland construction programme will simply be too great to be countered solely by cutting back public sector activity. without sensible economic policy implementation, however, the construction programme would be likely to lead to overheating of the economy, high inflation and instability. there is no the scope to discuss the bank ’ s analysis further here, however, so i shall merely refer to the coverage in the latest monetary bulletin. in recent public discussions it has repeatedly been claimed that the exchange rate of the krona is too high and the central bank needs to take measures to bring it back down, such as a large - scale cut in interest rates, which are said to be much higher in iceland than elsewhere. the fact of the matter is that the interest rate differential between iceland and its main trading partner countries has narrowed significantly recently. the short - term interest rate differential has not been less since 1996. the central bank of iceland ’ s policy rate is now lower than, for example, those of the norwegian central bank and the new zealand reserve bank, both of which also apply inflation targeting. the same applies to the policy rate in real terms, calculated relative to these banks ’ respective inflation targets. in fact, in real terms the central bank of iceland ’ s policy rate is at its lowest point since 1996. in this context it is also important to point out that after the change in the monetary framework in march 2001, i. e. after an inflation target was set for monetary policy and the krona was floated, the central bank has no specific objective as regards defending the exchange rate of the krona, which is determined on a day - to - day basis by supply and demand in the domestic forex market. various factors affect currency flows, such as interest rates and the interest rate differential with abroad, the merchandise and services balance and, last but not least, expectations about the future. it may also be noted that, since the autumn, the central bank has regularly purchased foreign currency in the domestic interbank market. the purpose of such purchases is to boost the bank ’ s foreign reserve, which was significantly depleted during its efforts to control the slide in the krona in 2000 and 2001, and not to influence the exchange rate, although undoubtedly they do so to some extent. the bank ’ s experience shows that direct intervention in the forex market with the aim of influencing the exchange rate of the krona only has a

29 november 2018 deputy governor rannveig sigurðardottir. introductory remarks at the 2nd annual nordic cyber in finance conference, helsinki, 29 november 2018 let me begin by saying that this conference is both timely and interesting for me, as i have only been in office for five months. given that i come from the monetary policy department at the central bank of iceland, cybersecurity has not been much on my agenda until now. it is, nonetheless, a very important topic. the central bank of iceland, and other central banks are facing several new challenges in this area, both in the financial sector generally and central banking more specifically. last week i attended an interesting macroprudential policy conference at danmarks nationalbank. the discussion paper prepared for that conference was called while the sun is shining, prepare for a rainy day. sitting there, i pondered what the discussion paper for this conference today might be called. perhaps something like the snowstorm is here – what do we wear? cybercrime is now the world ’ s fastest - growing type of crime. it has shot up to second place on the list of the top ten business risks worldwide, after not even making the list five years ago. the financial sector is particularly important because it greases the wheels of our economies, and cyber risks pose mounting threats to the financial system. developments since the emergence of the internet show that new technologies have brought with them new challenges. we only need to think of robotics, artificial intelligence, blockchains, and smart phones with 5g wi - fi to realize the extent of the changes that lie ahead for financial services. new technologies also bring opportunities. the austrian economist, finance minister, and banker joseph schumpeter demonstrated in the 1920s that successive waves of technological change raise productivity, income, and living standards. however, we know from long experience that technological change often results in costs involving new risks that must be addressed in order to optimise the net benefit. so while fintech will broaden consumers ’ range of choices in financial intermediation, it also brings new risks, both to the security of transactions and to privacy. to maintain financial stability and real economic activity, we need payment and settlement systems that are secure. as a result, cybersecurity has moved from being a technical issue to a central bank issue. that is why the nordic central banks have set up this forum for discussion and cooperation so as to foster closer cooperation on cyber resilience and cyber