compared with our expectations in december, risks to the inflation outlook are tilted to the upside, particularly in the near term. if price pressures feed through into higher than anticipated wage rises or the economy returns more quickly to full capacity, inflation could turn out to be higher. in a few weeks, the march ecb staff projections will provide an updated assessment, taking the most recent data into account. this will help the governing council better appraise the implications of the surprisingly high december and january inflation figures for the medium - term outlook. in particular, we will carefully examine how higher energy prices will transmit through the economy and affect the outlook overall. two channels could be at play, pulling inflation dynamics in different directions. on the one hand, rising energy costs can drive up prices directly, by increasing the cost of production, as well as indirectly, by having second - round effects on wages. on the other hand, they can have a negative impact on the incomes of households and the earnings of companies, thereby reducing economic activity and dampening the inflation outlook. in the past, the euro area has been particularly vulnerable to the second channel, as surges in energy prices weakened the spending power of households, and reduced inflation over the medium term. obviously, in our assessment of the inflation outlook, we have to bear in mind that demand conditions in the euro area do not show the same signs of overheating that can be observed in other major economies. this increases the likelihood that the current price pressures will subside before becoming entrenched, enabling us to deliver on our two per cent target over the medium term. indeed, while moving up over recent months, indicators of longer - term inflation expectations are consistent with this expectation. survey - based measures point to inflation returning to two per cent by 2023 and remaining close to this level thereafter ; and market - based indicators stabilise around levels somewhat below two per cent. the solid anchoring of long - term inflation expectations in the euro area is a reassuring development, coming after a long period when they were subdued. 2 / 3 bis central bankers'speeches to sum up, the euro area economy has continued to recover, although growth is expected to remain subdued in the first quarter. while the outlook for inflation is uncertain, it is likely to remain elevated for longer than previously expected, but to decline in the course of this year. in our meeting last week, we confirmed the decisions we took in december. accordingly, we will continue reducing the pace of our

rasheed al maraj : financial technology and its impact on the banking and financial sector keynote address by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the 1st middle east and africa fintech forum, manama, 29 march 2017. * * * your excellencies, distinguished guests, ladies and gentlemen, assalam u alaikum and good morning. i welcome you all to the afs fintech conference. this conference will discuss a very important and topical subject – financial technology and its impact on the banking and financial sector. afs deserves our appreciation for arranging this conference. we are living in an era of unprecedented changes mainly brought about by technological advancement. technology was once the backoffice function of a bank. then came the time when technology took the front seat and started driving the industry. now we are witnessing the next phase when technology is defining financial services. technology influences heavily the banks ’ strategy. if a bank is unable to satisfy its tech - savvy customers in an era of super mobility, hyper connectivity and immense computing power, it risks losing them to competition. this is the new normal. at the central bank of bahrain we understand the disruptive nature of fintech to business models and jobs but we have made a conscious decision to adopt it. the pace of innovation is not reversible, so the only choice we have is how well we prepare ourselves for the disruption. the cbb issued yesterday a white paper for consultation on a regulatory sandbox for fintech in which new companies can test their fintech solutions. we will also issue by the end of next month draft rules for consultation on crowdfunding platforms for both conventional and sharia compliant services. we will also release soon our new directives on cloud computing. these new initiatives are continuation of our efforts to provide the right mix of policies and products to develop and enhance the quality and competitiveness of services in the financial sector. bahrain has had a long history of proactive adoption of new technology. in the past few years the cbb has taken a number of important steps in this regard, which include : introduction of a new license of payment service provision and allowing payment service providers to issue prepaid cards to allow the unbankable segment access to affordable payment services including remittances. introduction of efts commercially known as fawri and fawrit as mandatory for all retail banks. the cbb is all for embracing innovation and new