existing regulatory framework to a particular innovation. two typical examples of such innovations are the ones based on distributed ledger technology ( dlt ) and the ones based on artificial intelligence ( ai ). regarding the former ( dlt ), in september 2020 the european commission adopted a proposal for a regulation as part of its digital finance strategy. regarding the latter ( artificial intelligence ), a proposal for a regulation was adopted by the european commission just recently. the second objective of the sandbox is to enhance legal certainty, i. e. to clearly delineate the scope of the regulatory framework within which an authorised institution may deploy a service, also identifying possible points of friction or needs for additional regulatory initiatives. the third objective of the regulatory sandbox is to promote knowledge. in particular, collaboration with sandbox participants will provide a two - way opportunity to disseminate and build up knowledge around financial technology. this knowledge will give us additional tools in order to inform our regulatory and supervisory approach, as and where appropriate. this can be done either on the initiative of the bank itself, taking into account the relevant risks and the required risk management mechanisms, or in the context of eu legislation initiatives. by way of illustration, in 2020 the bank ’ s executive committee adopted an act on the terms and conditions for remote electronic identification of natural persons as part of a digital onboarding process. i should stress that the operation of the regulatory sandbox is an innovation, even for the bank itself and a different, supplementary and structured approach to the exercise of its supervisory functions. recognising the challenge that this poses, we will be constantly monitoring and reviewing the procedures that we have put in place, so as to ensure that these objectives are met in the best way possible. in later presentations today, you will have the opportunity to hear details about how to access the regulatory sandbox and how it works. i look forward to your feedback on this new innovation facilitation mechanism that we are launching today. closing remarks 2 / 3 bis central bankers'speeches in closing today ’ s event, i would like to thank all the speakers and participants for their attendance. in summary, the regulatory sandbox will enable supervised fintech firms to test innovative solutions in a protected environment under the auspices of the bank of greece. thus, it will serve as a further driver of fintech and innovation in greece, in addition to the innovation hub. moreover, the regulatory sandbox will foster the market availability of innovative solutions, while safeguarding financial

candid discussions on policy effectiveness and unintended risks that could arise go a long way in minimising potential policy missteps. while capital flow volatility will remain a key feature of the global financial system, we have to acknowledge that with heightened uncertainties prevailing in the global economy, capital flow volatility would only intensify. for example, in malaysia, two - way capital flows have increased by almost three - fold in the aftermath of the global financial crisis. yes, we have had large swings in capital flows before and we have been able to manage these surges. what worries me, however, is the fact that monetary and financial stability risks posed by large and destabilising capital flows are expanding, evolving and becoming more entangled. we are very familiar with the risks posed by volatile capital flows. at the extreme, capital flows can lead to the build - up of domestic vulnerabilities, such as currency mismatches, external indebtedness and broader financial imbalances. these risks are becoming more entwined and complex than ever before. capital flows undoubtedly complicate efforts to achieve monetary and financial stability. allowing exchange rate adjustment to deal with capital flows may also be too simplistic. 1 / 3 bis central bankers'speeches while capital flow risks have become more complicated, the issue faced by policymakers remains unchanged – that is, how can we better manage these risks and yet maximise the benefits that come with capital flows. the experience of our economies in dealing with capital flow volatility underscores the need to ensure our economic fundamentals are robust. while this is necessary, it is not sufficient. we have seen how external developments that are beyond our control, such as taper tantrum and trade tensions, could trigger periods of sharp capital flow volatility in emerging economies with severe consequences. there are “ innocent bystanders ” who are gravely impacted. it is therefore imperative that collectively, we continue to urge the global community to better manage the risks arising from financial openness. more needs to be done at the international level to have, to quote imf md christine lagarde, “ safer capital flows ". nevertheless, we have to recognise that it is not easy to expect change at the international level. it will definitely take time. while the global community continues to debate and explore possible solutions to manage spillovers and spillbacks of policies in advanced economies, our economies will have to continue to grapple with