In addition, there has been an ongoing convergence in the financial sector as traditional boundaries continue to be eroded by changes in institutional structures, shifting legal barriers and product innovations. The proliferation of conglomerate arrangements have also increased the need for more consistent regulatory approaches across industry boundaries to reduce the prospect of regulatory arbitrage and inefficiencies. France and Germany have recently made announcements on the consideration to place the supervisory responsibility of the insurance sector with the Central Bank. This has however, drawn some resistance from insurers on grounds that" the concentration of responsibilities would create new conflicts of interest for the financial sector". Bank Negara Malaysia has been the supervisory authority of the banking industry since its establishment in 1959 and for the insurance industry since 1988. This integrated approach within the Central Bank has enabled us to form a more complete assessment of the risks to financial stability while ensuring consistency in the treatment of risks across the different industries to avert risks to the overall financial stability. The rapid pace of changes in the global economic and financial environment requires industry players to continually upgrade their expertise. Cooperation in this area between industry players can contribute towards bringing the insurance industry to the next frontier. Since its establishment in 1964, the Federation of Afro-Asian Insurers and Reinsurers has fostered a strong cooperation among insurance industry players in Africa and Asia. Such expertise may indeed be tapped through such regional platforms, bringing with it mutual benefit to the insurance industry in both markets.

Edward Scicluna: Price stability and beyond – understanding the impact of the ECB’s Strategy Review Speech by Mr Edward Scicluna, Governor of the Central Bank of Malta, at the Finance Malta conference, Valletta, 20 July 2021. * * * The European Central Bank (ECB) recently published its new monetary policy strategy, following a year-long review process that encompassed multiple layers of stakeholders – including the public. All the monetary policy instruments and concepts were minutely examined by both the experts and the Governing Council. A number of important changes were made as a result of the review – which was last carried out in 2003. The world has changed since then, and central banks – including the ECB – face numerous new challenges. We need to keep in mind that the ECB’s primary mandate – according to the Treaty on the Functioning of the European Union – is price stability. However, the Treaty does not specify what price stability means. That is where the ECB’s monetary policy strategy comes in, which quantifies price stability and in turn helps to anchor inflation expectations. For some time, the ECB saw high inflation as being the red flag. This is why the target has till now been an inflation rate of ‘close to but below 2%’. What has changed since 2003? Structural developments have lowered the so-called ‘equilibrium real rate of interest’ – the interest rate that is consistent with inflation at its target rate and where the economy is operating at its optimum.