ratings should be changed, the authorities ’ responsiveness to risk strengthened and arrangements for dealing with stress in the financial system implemented. other international bodies and institutions that have responded to the financial turbulences include the basel committee on banking supervision which just announced that it will take a number of steps to bolster the resilience of the banking system to financial shocks. moreover, the imf is sharpening its analysis of the financial sector and macro - financial linkages. it is welcome that the fund places greater focus on financial sector analysis in article ivs and continues its emphasis on financial sector assessment programmes. in this context, i would highlight that all 27 member states of the european union have either already completed an fsap or confirmed their future participation. it is welcome that a number of countries, including some systemically relevant ones, have expressed their intention to undergo an fsap exercise. at the eu level, the council of european ministers of finance ( ecofin ) has coordinated work aimed to strengthen supervisory and financial stability arrangements. this relates to the introduction of a european mandate for national supervisors, the clarification and strengthening of the functioning of the committees of supervisors at the level of the 27 eu member states and the wider use of colleges of supervisors to re - enforce the supervision of cross - border banking groups. moreover, a memorandum of understanding on cross - border cooperation in financial crisis situations between all relevant authorities in the eu, that is supervisory authorities, central banks and finance ministries, has been signed. in sum, a number of significant initiatives are underway at the various levels of governance of the global financial system to respond to the challenges of globalisation. to ensure that the responses by the bodies and forums in charge of global economic and financial stability are effective, it is of course crucial that they collaborate closely and complement each others ’ efforts. this should also be the case as regards the interaction between the fsf and the imf. conclusion the phenomenon of globalisation entails many important changes to the global macroeconomic, financial landscape. associated with this, it entails many policy challenges – both in terms of domestic macroeconomic policies and the international financial architecture. at the domestic level, a key challenge for monetary policy is to actively monitor changes in the inflation process, while continuing to solidly anchor inflation expectations. the strong relative price movements associated with globalisation make a firm focus on price stability is as essential as ever. at the same time, such a sound monetary policy framework can lay the foundations for foster

, algorithmic trading improves liquidity for large - cap stocks. 2 another key enabler of modern finance is encryption technology. without it, there would be no online banking and no electronic payments. but encryption has not only aided the digitalisation of traditional finance. it has also facilitated the rise of a new asset class and a parallel financial system : crypto - assets and decentralised finance. the problems with crypto - assets are many, well - documented and not well - addressed – from weak fundamentals to questionable governance and inefficient validation methods. 3 but the encryption technology on which crypto - assets are based has so far proven robust. and distributed ledger technology can offer real benefits to our financial systems through the streamlining of processes. but it is perhaps artificial intelligence ( ai ) that may prove to be the most transformative for the financial system. for years now, analytical ai models designed to perform specific tasks have helped financial institutions in areas such as fraud detection, credit assessment and predicting portfolio returns. but the recent breakthroughs in generative ai – thanks to growth in computing power combined with extensive data access – are inducing a rapid uptake of ai across the board. according to one international study, almost two - thirds of companies – across all regions, sectors and sizes – are already using generative ai. 4 while new technologies have brought tremendous benefits for the financial system over time, they have always tended to carry potential risks with them. and we see this tension between opportunity and risk playing out today. the latest ai models, and budding technologies like quantum computing, have the potential to exert a profound impact on our economies and financial systems. technological change and vulnerabilities as a tool, technology is neither good nor bad. it all depends on who uses it, and for what purpose. the financial sector will come up with numerous ways to use ai to improve existing operations. but the reliance on ever more sophisticated technologies – which typically demand highly specialised skills and enormous levels of investment to implement and maintain – creates new vulnerabilities in our financial system. we see this especially in areas where our financial institutions are increasingly reliant on a small number of external service providers. in july, a faulty software update from a leading cybersecurity firm caused worldwide computer outages and severe disruptions across many sectors, including finance. for 2 / 5 bis - central bankers'speeches instance, over eight million devices operating microsoft windows were hit simultaneously around the world.