Similarly, the investment decision is not an isolated one, but one that has to be made in view of the firm’s overall business goals, business strategies, capital needs, liabilities structure and risk appetite. Insurers would gain from establishing a robust Enterprise Risk Management (ERM) framework to manage these factors holistically. Good execution on this front will entail close coordination and communication between the investment function and other key functions, including actuarial, risk and finance, to ensure that dynamic trends on both investment assets and insurance liabilities, as well as the resulting impact on earnings and balance sheet volatility, continues to be monitored and managed dynamically. Asia driving global insurance growth 18. The ability to manage investment risks skillfully is even more essential in the Asian context, due to its rapidly growing share of insurance business and attendant risk exposures. 19. Over the next decade, Asia will continue to rise in importance in the global insurance arena. Munich Re for example, estimates that Asian premiums can register healthy growth of about 8% per annum, and account for almost 40%6 of global premiums by 2020. This is underpinned by positive structural factors such as a growing middle-class and rising affluence, aging demographics, and the continued industrialisation, trade and infrastructure development in emerging Asia. 20. In particular, I would like to focus now on how insurers can play a long-term role in Asian society and economies in two pertinent areas: one, financing Asia’s retirement funding gap; and two, financing Asia’s long-term investment needs. Financing Asia’s retirement funding gap 21.

The Americans present things in a different way, but they too consider that price stability is a necessary condition for sustainable economic growth and job creation. Most Finance Ministers of the euro area countries and the European Commissioner for Economic and Monetary Affairs Joaquín Almunia want regular discussions with the ECB. Does that bother you? The Treaty already arranges for precisely that. I myself invite Jean-Claude Juncker and Joaquín Almunia twice a month to attend the meetings of the Governing Council at the ECB, and I am invited to attend the meetings of the Eurogroup. As I have always said, we have to apply the whole Treaty and nothing but the Treaty. Is there really no political pressure? Everyone in Europe and the rest of the world knows that the ECB is independent, even on the major financial markets of New York, Tokyo, Singapore and Hong Kong. There is no doubt about that. The ECB's credibility, which stands at a very high level, relies on its independence. It is that independence which allows us to solidly anchor inflation expectations. Our credibility is reinforced by the strong team spirit within the Eurosystem – including our excellent relationship with the Bundesbank and its President Axel Weber – and within the ECB's Executive Board, which features of course my colleague Jürgen Stark. But in the view of many consumers, the introduction of the euro actually pushed up inflation. At the level of the euro area, we have had inflation under control since the introduction of the euro.