call those things second - round effects. so, the main effect is oil price shock, which leads to second - round effects. the thing about second - round effects is that they are asymmetric. so, the oil price will come down, but the second - round effects do not. they are sticky downwards, so it is asymmetric. and that is what we worry about. 2 / 7 bis - central bankers'speeches this means we cannot just look through supply shocks. we have to worry about supply shocks because of the asymmetry of second - round effects. what helps us is our framework for inflation targeting. we decided to target inflation so it stays within two to four percent. we made ourselves an inflation - targeting central bank. that helps because it anchors expectations. so, when you have supply shocks, inflation expectations do not go crazy. they are kind of sticky as well. that anchoring has been a big help to our monetary policy. once you have a well - anchored inflation, you can more easily manage second - round effects. we worry about whether inflation will remain well - anchored. so, we have estimates of the risks of the anchoring and worry about them de - anchoring every time we meet as a monetary board. so, that is the new monetary policy strategy or the new monetary policy framework that we follow. digitalizing the banking and payments system we also aspire to digitalize the financial system. we have four initiatives or four pathways to that end. one is called the open finance framework. if you are a well - established bank, you would be participating in this. if you are bpi [ bank of the philippine islands ], bdo, or metrobank, you will be part of the open finance framework. open finance means working with application programming interfaces ( apis ). these platforms connect you to other financial services and connect your customers to other financial services. then, you have to figure out how to integrate that platform into your system. but banks now are working with 50 [ to ] 100 apis doing many different things. our role here is to make sure that when you use your customers'data, you use it with their permission. they still own the data ; you do not own that data. your customers own their data and want to ensure that when you use that data with apis or other platforms, you get their permission first, and then you can do whatever you like. you could also do digital banking. this

strange because if there is a kink, it is so easy to arbitrage. you take positions on both sides of the kink, and then an arbitrage trade makes you money very quickly. but somehow, the kinks do not go away. there may be a lack of liquidity in the yield curve. maybe because we have been too ambitious, we designate market makers at several maturities. i think five maturities are where market makers should provide a reasonable bid - ask spread. that has not worked ; bid - ask spreads have remained very wide, reflecting the lack of liquidity. i think my proposal – and i would like to discuss with you - is do what europe did. in europe, when the eurozone was starting, government markets were fragmented. so, without any government initiative and without any central bank taking the lead, the swaps curve emerged as the benchmark curve. maybe that is the way to do it now. use the swaps curve. you are not as exposed to price changes as you would be if you were holding government securities because swaps, as you know, are just net payments between the fixed rate and the floating rate. 5 / 7 bis - central bankers'speeches if we have a swaps curve, maybe you need to make markets, perhaps in just one maturity, the five - year. maybe that will be good enough. somehow, this has not happened ; the short end still seems problematic. we do not have a good repo [ repurchase ] market to tie down the short end. i do not understand what the reason is because we have the gmra [ global master repurchase agreement ], which is supposed to be so simple and so acceptable that the whole world will use it. somehow, it has not worked here so, i would like to revive the swaps market, the irs [ interest rate swaps ] market, and insist on the market making at least the five - year maturity - which is the sweet spot for fixed - income securities, corporate bonds, and derivative contracts. so, maybe that will work. i welcome your advice on this. then, we have what i call our lake wobegon corporate bond market. those of you who are old enough might have heard of garrison keillor. lake wobegon is a fictional town in minnesota, and he said in lake wobegon, all the women are strong, all the men are good - looking, and all the