ties. it is beyond my ability to judge whether such criticism was justified or not, but it is quite possible that at some stage of economic and social development, factors, such as long - term customer relationships and mutual assistance, do have a role to play in the governance mechanism. the exact form of governance mechanism still varies across societies even in the age of globalization. in reviewing policies and systems, including financial regulation and supervision, it is very important that each jurisdiction strives to find an answer that best fits its own financial and economic structures. see masaaki shirakawa, “ way out of economic and financial crisis : lessons and policy actions ”, speech at japan society in new york ( april 2009 ) for discussion on the so - called “ lost decade ”. 5. towards better financial regulation and supervision vigorous discussions are currently being held in a variety of international forums, including the financial stability board and the basel committee, with a view to reforming the framework of financial regulation and supervision. although the asian financial system remains relatively stable, it cannot be guaranteed immunity from global financial crises, and has actually been significantly impacted by the current crisis. a robust global financial system is a public good that benefits the whole world. this cannot be over - emphasized. in order to prevent another financial crisis, each country should be well aware of this common objective in the first place. efforts should then be made to organize an internationally consistent regulatory and supervisory framework. in making such efforts, we must be very cautious that the reforming of the financial regulatory and supervisory framework is conducted in a well - balanced manner. when we talk about regulation and supervision, we should not confine the discussion within the sphere of regulation and supervision itself. we should rather keep our eyes on its wider context. when we embark on regulatory and supervisory reform, i believe, it is very important to strike the right balance in a number of dimensions as follows. balance between macroeconomic policy and financial regulation and supervision first, balance is needed between macroeconomic policy, particularly monetary policy on the one hand, and financial regulation and supervision on the other. in recent years, there has been a growing tendency among academics and central bankers to draw a clear line between the role of monetary policy and that of supervision and regulation : namely, monetary policy should aim at price stability, and regulation and supervision should aim at financial system stability. however, what we actually witnessed during the credit booming period was an unwelcome combination of asset prices increase, rapid credit expansion, and

##isations. i can only encourage eiopa to press on this issue and ensure that firms that would not be authorised in one country do not find a home in another. two of the panel discussions today focus on the customer in tomorrow ’ s world. let me comment on the role of technological innovation in distribution channels. first, more widespread deployment of online distribution channels has the potential to reduce costs, expand access to insurance products and improve consumer convenience. however, at the same time, online distribution requires a parallel increase in attention to cyber risk. the international association of insurance supervisors has recently discussed this topic, highlighting that the foundation of the insurance business is trust, and that trust could be irrevocably shaken if sensitive data were lost or claims payments disrupted. our assessment at the central bank of ireland is that cyber risks pose not only financial and reputational risks for individual insurance firms but that there are wider consequences for prudential supervision, consumer protection and financial stability. bis central bankers ’ speeches second, the automation of advice to potential customers is a promising development. however, as recently highlighted by the joint committee of the european supervisory authorities, there are pros and cons to these tools from a consumer perspective. the potential benefits include lower costs, increased convenience and greater consistency in advice. the primary disadvantage is the risk of an unsuitable final recommendation due to the lack of a human advisor. to represent a net gain for consumers, the design of automated advice systems must ensure that consumers are provided with clear, accurate and relevant information and recommended suitable products appropriate to their needs. the properties of suitability and transparency are among the most important principles underpinning the central bank ’ s consumer protection framework and are increasingly important in this period of rapid technological innovation. one of the panel sessions will focus on global and european financial stability. in the international regulatory community, there is increasing interest in the inter - relations between the insurance sector and the stability of the broader financial system. in one direction, excessive risk taking by insurance firms can be a source of financial instability, both directly and indirectly through the interconnections between the insurance sector, other financial intermediaries and financial markets. in the other direction, the insurance sector can make a positive contribution to financial stability, given the potential complementarities between the balance sheet structure of the insurance sector and the balance sheet structures of other sectors. much of the current risk discussion has focused on the implications of a protracted low interest rate environment for the insurance sector.