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

winners would this bring? those who have new jobs created by the technological progress? are we ready to reap the rewards of the fourth industrial revolution – to successfully apply big data, artificial intelligence, nanotechnology? to prepare ourselves for that, we are going to need highly qualified workers. yet, there is already a shortage of them even today. in lithuania, around a third of the population falls into a qualification mismatch category, meaning that their skills do not match labour market demands. let us not forget that the negative effects of technological development are geographically imbalanced. less urbanised locations will probably face faster development of automation due to the prevailing type of work there. these ongoing processes may further increase labour market inequality between lithuania ’ s regions. this leads us to the third challenge we are going to delve into today : regional disparity. it is already evident that more and more jobs are being created in large cities rather than in peripheral areas. up until the crisis of 2008, the unemployment rate in big cities matched the rate in the more remote regions. after the crisis, profound differences came to the fore : the average unemployment rate in such regions is double the size of that in cities. changes in lithuania ’ s economic structure shrunk the importance of the agricultural sector and amplified that of the service sector. clearly, regions find it difficult to adapt to these structural changes. what we have there now is structural unemployment – something that cannot be reduced even by the fast overall expansion of the country ’ s economy. we are also witnessing the consequences of persistent unemployment. people are leaving smaller cities. birth and mortality rates are quite similar throughout the counties in lithuania, but migration rates differ significantly. over the last 20 years, the number of young age workers in our country ’ s regions has shrunk by a half, except for the three biggest cities. 2 / 4 bis central bankers'speeches colleagues, i have just set forth three problems that we consider paramount. how are we to solve them? we have no crystal ball to turn to for answers. we can turn to each other, though. we have gathered here to try to arrive at possible ways of overcoming these challenges by means of discussion and search for best international practises. each of the challenges i have identified is quite distinct from the others. together, however, they are so closely connected that at first sight it is hard to tell cause and consequence apart. it is like the proverbial chicken - and - egg