steven maijoor : changing landscape, changing supervision preserving financial stability in times of tech revolution speech by mr steven maijoor, executive director of supervision of the netherlands bank, at the 6th annual afore conference, amsterdam, 9 february 2022. * * * hello everyone. it is great to be here again at the afore conference 2025. yes, you heard me correctly. it is 2025, and it's already the third physical conference since the end of the covid pandemic a few years ago. you may have come here by car. as you drove on the highway, your semi - autonomous vehicle was sending realtime data on your driving style to google insurance. your insurance premium is adjusted accordingly every month, and the underwriting risk is sold to a white - label insurance company. since you've had this car for almost three years now, you're soon expecting the first ads on your smartphone for the car models that your eyes have been scanning over the past few months. they will be accompanied by several personalised financing offers from banks and fintechs, based on your credit score data collected from a host of e - commerce and other data sources. since the exchange rate has been rather favourable lately, it may be attractive to use the stable - coin savings you hold in your ewallet attached to your favourite bigtech platform to make the purchase. sounds like science - fiction? i wouldn't be so sure. some parts of this scenario are already becoming reality as we speak. and although it is notoriously difficult to make predictions about the future, technological developments are going so fast that it may be wise not to dismiss this, or any other, scenario upfront. now personally my tech - savviness has its limits. my son is friendly enough to remind me when i play fifa with him on the play station. but believe me, i'm just as excited as you are about the tech revolution. also as a financial supervisor. because let's face it, fintech may offer large benefits to consumers in terms of new services, ease of use, inclusiveness, and costs. over the years, as a conduct supervisor at esma, and now as a prudential supervisor at the dutch central bank, i've seen quite a lot of innovations. i see innovation as a good thing. throughout history, financial innovation has often been a driver of economic growth and prosperity. that's why in a market economy

to have predictive powers as to future inflation. if it does, money growth can be a useful indicator of future inflation. in the 1980s, monetary targeting was abandoned by several industrialised countries notably on the grounds that national money demand was becoming unstable as a result of financial innovations. it had thus become difficult to assess to what extent changes in monetary growth would be translated into higher prices. the central banks of some of these countries have meanwhile switched to a strategy aimed directly at the attainment of price stability. their switch was, incidentally, often prompted by the implicit desire of policy - makers to prop up their reputation following years of relatively poor performances in terms of inflation. in 1989, my colleagues from new zealand were the first to adopt direct inflation targeting. they were followed by canada, the united kingdom, sweden, finland, spain and australia. although the name suggests otherwise, direct inflation targeting, too, makes use of an intermediate target, viz. expected inflation. as expectations are by definition hard to quantify, information variables are employed to forecast future inflation. if the predicted inflation rate deviates from the target, interest rate adjustment is called for. with a view to forecasting, direct inflation targeting employs, as i have pointed out, several information variables. such variables are, for instance, changes in wage costs, the exchange rate, commodity prices, equity prices and the money supply. as soon as these indicators point towards rising inflation, the central bank needs to take action. however, the explicit use of a variety of indicators poses a threat to the transparency and credibility of monetary policy, because there is then no immediate way of knowing which information has prompted interest rate decisions. in order to remedy this problem, most countries pursuing inflation targeting have taken to publishing inflation reports setting out the backgrounds to policy measures. such reports also enable the public to ascertain whether a central bank can be held accountable if the inflation target is not attained. after all, inflation may be caused by factors which are beyond the control of monetary authorities. it is for this reason that most countries cite circumstances under which the inflation target may be ignored or requires adjustment. for example, a number of central banks are not under any obligation to take corrective measures when indirect taxes are raised or when exogenous shocks such as energy price increases arise. as you can see, the two strategies are actually not as different as their names would have us believe. in practice, elements from both strategies are used, the distinction not always being as