policy, low interest rates and umps, and supply bottlenecks resulting from the pandemic and the war in ukraine — we must yet again rethink the role of central banks. 5 ) under these circumstances, we cannot but reflect on how the role of central banks should adapt. let me start by asking a few questions. the first is, do the current economic conditions simply call for central banks to revert to the past? in other words, as in the pre - gfc days, should they focus on the primary objective of maintaining price stability? my second question is, once this current inflation eases, will we see a return to the pre - covid trend of low growth and low inflation? and if so, should central banks use the same tools mobilized over the last ten years? or should they recalibrate them or develop a new set of tools accounting for the current episode of unexpected high inflation? the first question, perhaps, might be easy to answer in the context of emerging topics such as digital innovation and climate change. coping with them is unavoidable, and the role of central banks in these areas can only grow even larger going forward. in recognition of this, central banks around the world are at present either working to introduce cbdcs or accelerating research ; for green growth as well, they are 5 ) for detailed background of the current surge in inflation, for example, see carstens ( 2022 ). - 4 - drawing concrete plans to develop and implement policy tools. calls for the social responsibility of central banks are also likely to continue. this is because the shock from the pandemic and the subsequent recovery turned out to be uneven across income groups and industrial sectors. 6 ) this trend of polarization is likely to deepen in a high inflation environment. and, given the negative perception of the ump tools mobilized by central banks over the past ten plus years and the consequent rise in asset prices, there are growing voices calling on central banks to fulfill their social responsibility by cleaning up the mess they might have created. however, i do not know how effective existing monetary policy tools would be in addressing the challenges associated with income polarization or asymmetric sectoral shocks. as for the second question — whether secular stagnation will return once the current inflation episode cools off, and if so, whether central banks could use the same set of tools mobilized as before — there is not much i can say with certainty at this

the periphery as well as the equal interest of states big and small – alongside an international openness, outlook and leadership. as we pursue our ambitions for european competitiveness, i hope we continue to put this combination at its heart i also hope we recognise that long - term productivity and competitiveness are built through sustainable long - term policy. in financial regulation that means not pursuing short - term growth through lower standards, but rather long - term stability ( an absolute pre - condition for sustainable growth ), by ensuring those that finance our economy are safe, sound and resilient to the increasingly difficult external environment. finally, on regulation and in particular on building bigger capital markets in europe to help finance the economic transitions, i would hope that we don't take the option of thinking we can simply regulate it into existence. we need to concentrate on delivering structural market reforms to pensions, to retail savings, to the supply of investable assets and, at the end of the day, to the way our capital market works with the real economy. but that is a whole other speech. i hope you enjoy the conference. 1 the transformative power of innovation in the financial system - speech by cecilia skingsley 2 central bank of ireland innovation sandbox programme 3 https : / / www. centralbank. ie / docs / default - source / publications / corporate - reports / strategic - plan / our - strategy / central - bank - of - ireland - - - our - strategy - 2024. pdf? sfvrsn = d64b671a _ 3 ( pdf 2. 57mb ) – our 2024 strategy 4 we have described this in more detail in our supervisory risk outlook report ( pdf 2. 08mb ) from earlier in 2024. 5 budapest declaration on the new european competitiveness deal 5 / 5 bis - central bankers'speeches