This would lead to more bargaining power, and hence less  BIS central bankers’ speeches  3  sensitive to exchange rate fluctuations. Stronger domestic consumer base would also help lessen the dependence on external demand. All reforms I mentioned require concerted efforts from all public and private stakeholders. Policymakers should provide economic environment and infrastructure conducive to reforms. Particularly, financial literacy and risk management awareness should be fostered at all levels and sectors. Financial institutions also play a crucial role in developing financial products to facilitate transactions and risk managements. Businesses should upgrade productivity to enhance industry’s resilience to shocks. Advanced preparations will surely pay off. Lessons learned, challenges ahead, and policy implications Ladies and Gentlemen, As we are approaching the end of my talk, let me now share some final thoughts on lessons learned and challenges ahead. First, for countries that want to maintain autonomy on interest rate policy, exchange rate flexibility is a pre-requisite to living with capital flows. Nevertheless, extreme exchange rate fluctuations may cause misalignments. A trade-off between flexibility and stability thus requires policymakers to identify the exchange rate framework suitable for the economy. This can be a daunting task in practice, as the target is often country-specific and subject to dynamic economic developments. Keep in mind that monetary policy can do little to influence real exchange rates in the long term. Attempts to give the exchange rate more weight in monetary policy deliberations will also reduce the autonomy in controlling interest rate, leading to more interest rate volatility.
In addition to wanting to see firms that are adequately protected against cyber-attacks and prepared to respond should they occur, we are equally as concerned with the overall safety and soundness of the financial system – as a whole. No one firm or agency is going to come up with the one and only permanent solution or protection against cyber-attacks. I see how we approach cybersecurity similar to how we approached Y2K – I’m sure you all remember that. •  We need an approach that everyone agrees to adopt. •  We need to see more public/private partnerships in the development of that approach. •  We need to come together to identify the vulnerabilities that are shared and what needs to be done. •  We need to agree on a path forward and how we test it. •  We need to acknowledge that, unlike Y2K, this does not have an expiration date. Cybersecurity is a “new normal.” It is going to become part of our vocabulary in nearly every exam we conduct, conversation we have with senior management, and conversation about the future of financial services. To be successful, we have to agree that we have common goals; although we can approach them from different angles and think creatively about solutions, we should all be working toward understanding the threats we are facing. The threat landscape is shifting constantly, and we are all responsible for keeping up with the changes and adapting our controls accordingly.