beveridge curve. a possible explanation for this would be an increasing skill mismatch between unemployed workers and available jobs. structural changes in the labour market as a result of changes to participation, technological change or those stemming from a shock such as the mining boom can contribute to a mismatch. lower mobility, either geographical or at the job level, can also reduce the ability of firms to find the appropriate worker. this last explanation seems unlikely given the relatively large net interstate migration flows we have seen as conditions in the state labour markets have varied, most notably the large flows in and then subsequently out of western australia. finally, it may reflect underinvestment in training over recent years, including in technical skills. that said, the vacancy rate is currently at its highest relative to the size of the labour force. that too is a very positive signal for the labour market outlook. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 11 / 13 10 / 17 / 2018 the state of the labour market | speeches | rba graph 10 conclusion to sum up, the labour market is in pretty good shape : employment growth is above average, the participation rate is at a high level, the vacancy rate is at an all - time high and the unemployment rate is falling. however, the long - term unemployment rate has been little changed of late and wages growth remains low. the near - term indicators suggest demand for labour remains above average and the expected growth in the economy over the next few years should gradually reduce the spare capacity in the labour market. as we have stated many times, we expect that will lead to a gradual increase in wages growth and, in turn, inflation. there are a number of uncertainties around the extent and timing of the decline in the unemployment rate and the pick - up in wages growth. the recent international experience indicates that the unemployment rate could decline further than historical experience would suggest before we see a material increase in wages growth. but against this, further increases in labour demand may be met more from the pool of unemployed rather than from people not currently in the labour force. that is, the unemployment rate may decline faster than we expect, rather than the participation rate increase further. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 12 / 13 10 / 17 / 2018 the state of the

has been considerably enhanced and strengthened since 2008, its continued development should be ensured when necessary. we are ready to explore all options within our mandate to ensure we can continue to fulfil our responsibilities under the treaty, i. e. promoting the smooth operation of payment systems and ensuring the effective transmission of monetary policy, for which the stability of the centrally - cleared repo segment of euro money markets is crucial. 1 / 2 bis central bankers'speeches ( ii ) technical innovation let me now turn to the second point. how the financial ecosystem is experiencing rapid change due to technical innovation. the eurosystem is responsible for operating two of the systems that form the backbone of financial markets in europe, namely target2, the real - time gross settlement system for the euro, and target2 - securities ( t2s ), a service for the integrated settlement in central bank money of securities transactions. the smooth operation of these services is crucial for maintaining confidence in the euro and to support monetary policy operations. furthermore, it plays a central role in ensuring the stability of the european financial system and in boosting economic activity. the eurosystem market infrastructure is designed to meet the highest levels of safety and efficiency. efficiency covers multiple dimensions : of course it means low costs for institutions that use the infrastructure, but it also implies the opportunity for them to benefit from a range of functionalities that bring added value to the services offered along the value chain. the eurosystem is continuously looking for ways to improve the efficiency and lower the costs of its market infrastructure. it also considers how best to respond and take advantage of technical innovation and meet new user needs, while staying ahead of evolving risks such as cyber risk. in this regard there is also a need to assess if technical innovation can create opportunities to improve financial services. nevertheless, a certain level of caution is needed when technological innovations are applied to financial markets. for innovations to be used in the financial system an essential requirement is that they are proven safe in order to avoid any negative consequences. consequently, if and when innovations are proven to enhance the provisions of financial services without harming safety, they should be explored. ecb working as a catalyst for market integration as a public authority the ecb will keep a watchful eye on technical innovations and assess their possible impact on financial markets. we do this work together with standard setting bodies. the first condition is that innovations are proven to be safe before they find their way into the market. second, it is equally important