winners would this bring? those who have new jobs created by the technological progress? are we ready to reap the rewards of the fourth industrial revolution – to successfully apply big data, artificial intelligence, nanotechnology? to prepare ourselves for that, we are going to need highly qualified workers. yet, there is already a shortage of them even today. in lithuania, around a third of the population falls into a qualification mismatch category, meaning that their skills do not match labour market demands. let us not forget that the negative effects of technological development are geographically imbalanced. less urbanised locations will probably face faster development of automation due to the prevailing type of work there. these ongoing processes may further increase labour market inequality between lithuania ’ s regions. this leads us to the third challenge we are going to delve into today : regional disparity. it is already evident that more and more jobs are being created in large cities rather than in peripheral areas. up until the crisis of 2008, the unemployment rate in big cities matched the rate in the more remote regions. after the crisis, profound differences came to the fore : the average unemployment rate in such regions is double the size of that in cities. changes in lithuania ’ s economic structure shrunk the importance of the agricultural sector and amplified that of the service sector. clearly, regions find it difficult to adapt to these structural changes. what we have there now is structural unemployment – something that cannot be reduced even by the fast overall expansion of the country ’ s economy. we are also witnessing the consequences of persistent unemployment. people are leaving smaller cities. birth and mortality rates are quite similar throughout the counties in lithuania, but migration rates differ significantly. over the last 20 years, the number of young age workers in our country ’ s regions has shrunk by a half, except for the three biggest cities. 2 / 4 bis central bankers'speeches colleagues, i have just set forth three problems that we consider paramount. how are we to solve them? we have no crystal ball to turn to for answers. we can turn to each other, though. we have gathered here to try to arrive at possible ways of overcoming these challenges by means of discussion and search for best international practises. each of the challenges i have identified is quite distinct from the others. together, however, they are so closely connected that at first sight it is hard to tell cause and consequence apart. it is like the proverbial chicken - and - egg

in the level of settlement balances, all other things being equal. fluctuations can also occur due to differences in the timing and size of our asset purchases versus the relatively lumpy maturities of our legacy asset holdings. we will aim to minimize fluctuations in order to keep settlement balances in the range but, on rare occasions, we may not always be able to for a day or so. - 7while our core objective is to supply enough settlement balances in the financial system for us to be able to implement our monetary policy effectively, that ’ s not our only consideration. another important factor is market discipline, given that we are also responsible for promoting a stable and efficient financial system. what do i mean by this? well, we don ’ t want to see major banks and other core financial institutions under - investing in their capacity to robustly manage their liquidity because they have developed an unhealthy over - reliance on settlement balances. in managing their liquidity needs, financial market participants should be able to respond to fluctuations in those needs in other ways — for example, through access to markets. going forward, our assessment of the optimal range of settlement balances will account for the evolving nature of both payments and the financial system, as well as the need to maintain market discipline. the return to business - as - usual balance sheet management okay, so what will business - as - usual look like after qt ends? under our normal course of balance sheet management, we buy assets on a passive basis to reflect the autonomous rise in our liabilities. traditionally, the biggest liability has been currency in circulation. demand for cash usually grows at roughly the same speed as the nominal growth of the economy. i want to be clear, though, that while qt is almost finished, the composition of our asset holdings won ’ t be back to normal for quite some time. as i explained in my speech last march, we want to restore a more balanced mix of assets with a broader range of maturities — including more short - term assets — than we hold now. currently, our asset portfolio is made up almost entirely of goc bonds. and as a result, our asset holdings have a maturity profile that skews longer than it did before the pandemic. going forward, we will hold not only goc bonds but also goc treasury bills ( t - bills ) and term repos, just as we did before the pandemic. in steady state, we will aim