period of very low 1 / 7 bis - central bankers'speeches inflation, followed by the closing down of economies and the prospect of deflation, then the return of very high inflation from the disruption of supply chains and a war - induced energy shock and now a relatively rapid process of disinflation. i expect a fragmenting global economy undergoing significant transitions - in demography, in technology, in climate - to mean that volatility and uncertainty will reflect a new normal, posing challenges to all economic policy - maker. the changing landscape of the global financial system the reality of course is that the pace of change in our economy and financial system has been accelerating rapidly since the gfc. it has required central banks, regulators, firms and consumers to adapt, transform and evolve to meet the challenge that it poses. the singapore fintech festival showcases and highlights the sheer breadth and depth of the innovation that is happening in financial systems across the globe and give policymakers an insight into the future. since the latter stages of the 17th century, when the world's oldest central bank, sweden's riskbank was founded, price stability, mitigating crises and stabilising economies have represented a central bank's primary mandate. while change and challenge has been constant throughout the history of central banking, the challenges and changes that central banks face today are more complex, more connected and more multifaceted than ever before. we are living in a world of unprecedented innovation1, change, complexity and uncertainty. in the past five years, we have endured a global pandemic and witnessed russia's war on ukraine and its people, as well as an escalating conflict in the middle east and an increasingly uncertain geopolitical environment. the break - down of a rules - based world order, the risks posed by, at best, reduced interconnectedness and, at worst, a preference for autarky and the prioritisation of shortterm, national interests over the common good, all add to the sense that the changes we are seeing feel different, and not in a good way. at the same time as this changing geo - economic landscape, the financial system both in ireland and globally has been undergoing its own rapid change over the last number of years. in particular, technological innovation has had a profound impact across all aspects of our lives and the provision of financial services is no different. technology is a key part of the financial services landscape today. and while the change so far has

homes and businesses, is one. so are the fax and the cell phone. the newer biotech innovations are most especially of this type, particularly the remarkable breadth of medical and pharmacological product development. at the end of the day, however, the newer technologies obviously can increase outputs or reduce inputs and, hence, increase productivity only if they are embodied in capital investment. capital investment here is defined in the broadest sense as any outlay that enhances future productive capabilities and, consequently, capital asset values. but for capital investments to be made, the prospective rate of return on their implementation must exceed the cost of capital. gains in productivity and capacity per real dollar invested clearly rose materially in the 1990s, while the increase in equity values, reflecting that higher earnings potential, reduced the cost of capital. in particular, technological synergies appear to be engendering an ever - widening array of prospective new capital investments that offer profitable cost displacement. in a consolidated sense, reduced cost generally means reduced labor cost or, in productivity terms, fewer hours worked per unit of output. these increased real rates of return on investment and consequent improved productivity are clearly most evident among the relatively small segment of our economy that produces high - tech equipment. but the newer technologies are spreading to firms not conventionally thought of as high tech. 1 it would be an exaggeration to imply that whenever a cost increase emerges on the horizon, there is a capital investment that is available to quell it. yet the veritable explosion of high - tech equipment and software spending that has raised the growth of the capital stock dramatically over the past five years could hardly have occurred without a large increase in the pool of profitable projects becoming available to business planners. as rising productivity growth in the high - tech sector since 1995 has since the early 1990s, the annual growth rate in output per hour of non - financial corporate businesses outside high tech has risen by a full percentage point. resulted in an acceleration of price declines for equipment embodying the newer technologies, investment in this equipment by firms in a wide variety of industries has expanded sharply. had high prospective returns on these capital projects not materialized, the current capital equipment investment boom - there is no better word - would have petered out long ago. in the event, overall equipment and capitalized software outlays as a percentage of gdp in nominal dollars have reached their highest level in post - world war ii history. to be sure, there is also a