artificial intelligence and machine learning will do most of the heavy lifting in predicting economic indicators upon which to base central bank policies. we will undoubtedly rely on technology to obtain real - time forecasts. we will also undoubtedly use big data analysis to detect bubbles in the financial markets and to identify and analyze complex macro - financial linkages. central banks are already seeking to obtain more micro - level data by becoming data warehouses and to develop - data based supervisory tools which will improve risk mitigation. will this technology replace us – central bankers – in making policy decisions? my answer is : certainly not! let me elaborate. first, a great deal of uncertainty exists as to how basic economic relations evolve over time. economics, though increasingly fixated on mathematics, econometric tools, and applications is a social science focusing on how humans make decisions. it does not, and never has been, a homogenous body with a firm canon of knowledge. fundamental structural features of the economy, known by more familiar names such as the " natural rate of unemployment ", " potential output growth ", " neutral real interest rate " – what fed chairman mr. jerome powell called the " stars " 1 – change location significantly over time, making " navigating by the stars " rather challenging. furthermore, even seemingly simple issues, such as establishing causal links rather than merely finding correlations among various economic variables, require lengthy discussion and often lead to clashes of opinions. second, the effectiveness of central bank policies is based on adequate communication. and communication boils down to presenting stories that shape the expectations of market participants regarding future monetary policy. to date, the ability to present such nuances associated with the conduct of monetary policy has been exclusively human. finally, it may also happen that policy objectives are not achieved, due to unforeseeable crises – so - called black swans. central banks during " black swan " episodes must behave differently than in normal times – and rightly so. deciding the best way forward when circumstances are rapidly changing and the future is clouded by enormous uncertainty is a task which no computer is able to cope with, today or quite possibly ever. it is thus my firm conviction that, in a hundred years'time, there will still be some central bankers around to gather and celebrate two hundred years of lietuvos bankas. dear colleagues, 2 / 3 bis - central bankers'speeches central banks must embrace the revolution underway in digital money to ensure that they remain at the heart of the global

a good thing for the economy because people who already own homes feel richer, and they can spend more due to the valuation of their assets ”. but at the same time, we should be wary of house price growth turning into an unsustainable boom. it is obvious that we do not want another credit - fuelled housing price bubble, such as the one which led to a very painful burst in 2008. to this end, a set of properly calibrated macroprudential policy measures is the key to maintaining financial system resilience. in welcoming you all today, i hardly need to list the benefits of macroprudential policy and its instruments. it is widely acknowledged that by imposing additional regulatory requirements, 1 / 5 bis central bankers'speeches macroprudential policy can restrain lending to excessively risky borrowers, or create the necessary buffers in financial institutions. in other words, it can help ensure that the financial system serves the real economy – instead of hindering its activity or amplifying shocks. therefore, it is not at all surprising that after the great financial crisis, macroprudential policy gained relevance, becoming mainstream. in fact, lithuania was one of the first countries to introduce such measures back in 2011. we believe these measures were crucial for building and maintaining sound lending practices. nowadays, borrower - based measures are widely used in the eu and throughout the world. however, as we move into the post - pandemic “ new normal ”, we should be very wary of the new risks revealed by the covid - 19 crisis. we also need to carefully assess policies currently being applied to understand if they are sufficiently effective in the new environment. therefore, i am very happy to have you all gathered here to discuss how borrower - based measures should be adjusted in the light of recent developments. the period of the covid - 19 pandemic was the “ first test of the framework in a major economic crisis ”. i think everyone agrees that the framework passed the test successfully ; however, some issues related to the framework ’ s functioning in the medium term – namely, its efficiency and transparency – have been revealed. as the eu - level discussions on possible minimum harmonization of borrower - based measures are currently ongoing, now is a perfect time to evaluate the role borrower - based measures played during the pandemic. we need to look further into what changes could be made to the macroprudential framework and its application to make