The board is also responsible for the follow-up of recommendations made by the ESRB. A further euro area governance reform relates to the Single Supervisory Mechanism (SSM) which involves the establishment of effective and early intervention mechanisms. The SSM endows the ECB with the ultimate responsibility for specific supervisory tasks related to the financial stability of Euro area banks. The rationale for a single supervisory mechanism comes from the increasing interconnectedness between financial institutions and markets across the euro area. In addition, the proposed banking union does not only provide for the shifting of supervision of banks to the European level, as in SSM, but also brings up for consideration the introduction of an integrated system of bank crisis management and deposit protection. 4  BIS central bankers’ speeches  Various recent reports, such as those authored by Liikanen, Volcker and Vickers, recommend a structural reform of the banking sector. The proposed reforms are designed to limit the likelihood of banking crisis, improve the resolvability of banks and safeguard taxpayer interests. Furthermore, the Liikanen Group concludes “that it is necessary to require legal separation of certain particularly risky financial activities from deposit-taking banks within a banking group.” Conclusion Regardless of the particulars of the eventual governance changes, it is clear that the economic and financial crisis has been the spark for reforms that may reshape economic institutions and financial supervision at both the national and international levels.

Developing Asia is still growing at double the global average. Rising affluence and a growing middle class will underpin a steady increase in insurance penetration rates that are still well below the global average. Continued industrialisation, expanding cross-border trade, and infrastructure development will drive demand for insurance solutions to mitigate a variety of business risks. Second, Asia is vulnerable. Asia is highly prone to natural catastrophes. •  Asia accounted for 52% of global economic losses from disasters between 2000 and 2009, and 81% in 2011 alone. •  Only about 35% of the economic losses from 2011 were insured, resulting in a heavy economic burden for affected countries. A growing risk awareness, coupled with rising asset values, will lead to greater demand for catastrophe insurance and reinsurance, including alternative risk transfer solutions. Following the 2011 catastrophes, several Asian countries have already established insurance pools for key catastrophe risks. Third, Asia is ageing. Asia is facing a rapidly ageing population. By 2050, Asia and the Pacific will be home to 62% of the world’s elderly population, with one in four persons aged 60 and above. This will lead to greater demand for health insurance, annuity and other retirement security products. BIS central bankers’ speeches  1  As the leading insurance centre in Asia, Singapore is well-placed to serve the burgeoning insurance needs of the region. The insurance industry is one of the brightest stars in the constellation of Singapore’s financial sector. The industry has done remarkably well, but its story is not well known.