gediminas simkus : united fighting the darkness of growing threats opening remarks by mr gediminas simkus, chairman of the board of the bank of lithuania, at the annual aml center conference 2024 " beyond the surface of illicit finance : allied reponse ", vilnius, 16 may 2024. * * * check against delivery dear colleagues, distinguished guests, ladies and gentlemen, i'm grateful to the center of excellence in anti - money laundering for hosting us during this, the third annual conference. i think this is beginning to develop into a nice tradition. these conferences serve as platforms to take stock of the achievements and challenges ahead, safeguarding us all against the risks of money laundering. on the frontline of a new reality – that was the topic of last year's conference. indeed, looking back at the year since we last met here, i notice that events on the aml frontline were plentiful. let me begin with a summary of the year – in my eyes, it is as follows : we are making progress. that is because we act as one. in other words, domestic, regional, and international cooperation underpins the improvement of our ability not only to deter, but also to act against money laundering practices. ladies and gentlemen, i would like to draw your attention to three key developments that have occurred since i stood here last year : consistency in fintech, the path towards crypto maturity, and regional dialogue. first, on consistency in fintech. lithuania is a fintech hub : we care about fintech and, as i emphasised last year, we maintain and foster a fintech - friendly and open environment. that remains unchanged. what has changed is the fintech strategy, which was developed last year. this is the view towards the long - term development of the sector adopted by lietuvos bankas, the ministry of finance, and a wide range of other institutions. its essence is that leadership comes with responsibility. more specifically, we have committed ourselves to promoting quality over quantity and ensuring that lithuania is a safe and reliable jurisdiction. the management of aml risk is a pillar of the fintech strategy, and improving the cooperation of state institutions in general and the exchange of information in particular is an important remedy against the dangers of money laundering. 1 / 3 bis - central bankers'speeches second, the path towards crypto maturity. the view that the sector is governed by the principles of the wild west was once held widely

##eu – namely the green transition and digitalization – might put a positive pressure on the potential output growth. investments in green and digital technologies could boost labor productivity and foster sustainable growth. consequently, the ultimate question we policy makers must find answers to is which factors will be dominating in the near future. with such long - term developments and the current circumstances, how should we balance economic slowdown and increasing prices? to be more precise, what weight should we give to the taylor rule variables and what time dimension of projections should we focus on? there is some merit to believe that structural forces that push neutral interest rate lower such as demographics, globalization and digitalization may not fade out - globalization may be an exception to some extent as i tried to explain - and a threat of the too - low inflation may return to our agenda. in other words, if the interest rate changes affect prices in one - to - two years ’ time only, how strong should we be in reducing our monetary policy accommodation? nevertheless, this does not change the fact that in the current environment we must tighten monetary policy to keep inflation expectations from increasing to unsustainable levels. de - anchored inflation expectations would make it much more difficult for the central bank to achieve its mandate of price stability. overall, i think we should gradually raise rates to retain credibility. we must be apprehensive, that, as the neutral rate is currently much lower, we cannot increase policy rates to the levels seen 15 - 20 years ago. still, as of this moment, it is extremely important to prevent the situation in which inflation expectations become entrenched at significantly higher levels than our inflation targets over the medium term. looking at the longer horizon, at the next strategy review, it is worth discussing what monetary policy framework is mostly fit for the new issues that relate to climate change risks, retreating globalization, and returning geopolitical threats. to this end, i am grateful for this opportunity to exchange the views in this panel discussion. monetary policy