As Greg Mankiw put it: “Wishful thinking is one reason that monetary policy has historically been excessively inflationary… To my mind, wishful thinking is as worrisome a problem for monetary policy as time inconsistency.” Genuine concern for the unemployed means a recognition that sustainable reductions in unemployment require a combination of monetary stability on the demand side and microeconomic reforms such as the New Deal on the supply side. As Alan Blinder has reminded us, we need soft hearts and hard heads, not the other way round. Despite suggestions to the contrary, the MPC does have soft hearts and hard heads, and does not base its assessment of the labour market – never mind its decisions on interest rates – solely on estimates of the growth of average earnings. An assessment of the overall tightness of the labour market requires all the available data – both quantity and prices – to be analysed. The wealth and diversity of published labour statistics means it is rare for them all to point in the same direction. The MPC’s analysis of the labour market is like the construction of a jigsaw puzzle. The pieces of data are assessed alongside each other in order to build up as clear a picture as possible. No single piece of data is interpreted in isolation. And no single piece of data is, in itself, decisive. The growth of wages and salaries is an important indicator of domestically generated inflation.
This January, the Bureau launched a Fintech Proof-of-Concept Subsidy Scheme. This scheme provides financial incentives to banks to transform their processes through the use of innovative Regtech solutions. Regtech firms will also benefit as they will have more opportunities to showcase and validate their solutions and gain experience in the Hong Kong market. 17. In addition to offering incentives and opportunities for developing innovative use cases, I would also like to highlight several key infrastructure developments that will make launching Regtech solutions easier. 18. One example of these is that the HKMA is developing the CDI, the Commercial Data Interchange, that will allow SMEs to grant financial institutions access to their data at different commercial establishments, of course with their consent. These will include ecommerce platforms and utilities companies. With more alternative data available to financial institutions, SMEs will stand a better chance of obtaining bank financing and also other customised services that will be made possible by the use of advanced data analytics. 19. I should also mention the HKMA’s collaboration with the Government on the “iAM Smart” platform, which is a one-stop personalised digital services platform available free of charge for everyone in Hong Kong. Financial institutions can now leverage iAM Smart to provide 2/3  BIS central bankers' speeches  customers with Regtech services such as remote onboarding and log-in authentication. The HKMA is now exploring a corporate version of iAM Smart, which will offer another important infrastructure to support Regtech development. 20.