2  BIS central bankers’ speeches  – are able to muster the courage to craft tax, spending and regulatory incentives for jobcreating enterprises to mobilize liquidity for expansion and payroll growth. Thus far, inflation has yet to raise its ugly head, and inflation expectations as measured by consumer surveys and market-traded instruments have remained stolid. However, with each passing day, constantly adding massive amounts to the monetary base will inevitably present a significant challenge to the FOMC, which must ultimately manage this high-power money so that it does not become fuel for sustained inflation above the committee’s 2 percent target once it is activated and flows into the economy. Thus, I was more than supportive of the collective decision of the FOMC to begin cutting back on our rate of accumulation of assets beginning in December. Over the course of our recent meetings, we have cut back from accumulating $ billion per month in Treasuries and MBS to a present rate of $ billion per month. This is still somewhat promiscuous. Even with the taper, the recent decline of mortgage supply has driven our absorption of the MBS market to 85 percent of fixed-rate MBS issuance. The fall in net MBS supply is outpacing the taper. At the current reduction in the run rate of accumulation, the exercise known as QE3 will terminate in October (when I project we will hold more than 40 percent of the MBS market and almost a fourth of outstanding Treasuries).

However, a key challenge observed was that workers became siloed in their various specialties, thus impeding collective innovation goals. Michael Tushman, a Harvard Business School professor known for his work on organisation design, was an early researcher into efforts to overcome this challenge. From there, he coined the term 'boundary spanners' 3 – individual connectors with the ability to bridge information from different verticals of an organisation to unlock innovation value. Since 1958, the boundary spanning role has been popular throughout academic research into innovation systems. With hindsight, we know that period ended up as the golden age of capitalism, marked by greater organisational efficiency, specialised production and trade expansion. It is intriguing to find insurance at a similar crossroad today. Consumer activity is becoming entrenched in digital ecosystems. Critical sources of information which were previously unconnected are becoming more connected. This has the potential to not only deepen protection, but also mitigate long-held issues in insurance like moral hazard and adverse selection. 1/6  BIS - Central bankers' speeches  While the pandemic presented numerous challenges, it underscored the value of financial security in times of stress. This has generated greater consumer and business appreciation for protection solutions. Like the past, there are immense opportunities emerging across ecosystem verticals, merely awaiting a connecting agent to unlock them. I believe the insurance and takaful industry is uniquely positioned to act as boundary spanners that can pave the direction for innovation, break down traditional barriers, and influence positive consumer behaviours.