decisions, for instance, they use algorithms to objectively evaluate available information. the same goes for bank customers when making investment decisions. as you might have guessed already, we at the bundesbank take an overall positive view of digitalisation. established banks, fintech firms and other enterprises are all in the process of transforming technologies into innovations. in economic terms, this is resulting in productivity gains, growth, improved competitiveness, a more robust economy and, last but not least, greater prosperity. it is also enhancing the stability of the euro. as a supervisory authority, we want to monitor these developments in a constructive way because, ultimately, they promise cost - saving opportunities as well as new earnings potential for individual institutions. but of course, as a supervisory authority, we are also keeping a close eye on the inherent risks. i see no contradiction here. quite the contrary : when it comes to innovation, getting a handle on the risks it poses is key. in 90 years of banking supervision, this has always been the case. we should not simply equate innovation with novel financial products or processes that provide no added value in the long run. innovation needs to be a package deal. 2 / 6 bis central bankers'speeches 3 risks of digitalisation this brings us to the risks and challenges that arise in the context of digital transformation and need to be taken into account. to be clear, tackling digital risk is an enormous challenge. i believe that this can be put down to three key factors. first, there are new types of risk. traditionally, banking supervisors focus on capital and liquidity. and that will remain the case for new types of risk – in it, for instance. however, simply wanting to hold sufficient capital to counter any and every new risk has its limitations. for example, how can a server outage of several hours, with all its ramifications, be expressed in terms of financial risk? how can you put a figure on the damage caused by internal processes coming to a standstill and on the losses that arise due to nothing working anymore and no service being available? in many cases, there is no historical parallel or other benchmark for such matters, but there still exists the need to come to grips with such risks. furthermore, there are what are referred to as “ unknown unknowns ” – risks whose existence may remain entirely undiscerned until the first time they cause an incident. with that in mind, banks are now employing innovative technologies such as advanced

of the fatf during the june 2024 plenary. the programme of work that led to this decision was carried out by a number of state agencies, coordinated by our prime contact who is based at bank of jamaica. jamaica aims to continue improving our aml / cft regime, as we prepare for our 5th round mutual evaluation, scheduled for june 2026. near - term outlook inflation the declining trend in inflation that we have recently experienced is expected to be interrupted temporarily by the passage of hurricane beryl. as we know, the system affected a significant proportion of jamaica's agricultural infrastructure and supply, which will drive pricing decisions for selected starchy foods and vegetables over the next 2 – 3 months. the bank is still actively assessing this and other influences on the outlook for the cpi but, in the context of expected higher agricultural food prices, inflation may temporarily track above the bank's target range of 4 – 6 per cent for 2 – 3 2 / 3 bis - central bankers'speeches months, starting in august 2024. inflation is however expected to return to the target range towards the end of the year as the agriculture sector rebounds, and inflation will generally remain in that corridor. gross domestic product ( gdp ) economic growth for fy2024 / 25 is also likely to be impaired by the impact of the storm on the agricultural sector and related sectors. international reserves jamaica's gross international reserves at end - june 2024 amounted to us $ 5. 2 billion and, notwithstanding the passage of hurricane beryl, are projected to remain adequate over the medium term. conclusion ladies and gentlemen, in april 2024, bank of jamaica received written confirmation from the minister of finance and the public service that the inflation target for jamaica will be maintained at 4. 0 to 6. 0 per cent for the next three years. the bank remains resolute in its commitment to seeing inflation firmly anchored in this target range. the mpc's decisions on policy rate adjustments and other monetary policy actions in the near term will continue to be data dependent. in the meantime, the bank will maintain heightened surveillance of the risks to inflation. thank you. 3 / 3 bis - central bankers'speeches