may know, the fsf was established in 1999, in the wake of the asian financial crisis, to promote international financial stability. the fsf uniquely brings together national authorities responsible for financial stability in major international financial centers, representatives from international financial institutions, representatives of international regulatory committees, and committees of central bank experts. its role is to foster cooperation among authorities at a global level in identifying vulnerabilities and strains in the global financial system and developing strategies to reduce systemic risk. an important element of the fsf's work is to assess risks to financial stability that might arise from current economic and financial developments, to discuss risk scenarios, and to consider the capacity of the financial sector to absorb shocks. several years of solid economic growth and a benign financial environment have helped strengthen balance sheets in the financial sector, and this strength seems likely to continue. nonetheless, a number of risks and potential vulnerabilities are receiving attention, including the implications for growth and inflation of high oil prices ; global fiscal and current account imbalances ; elevated house prices and household debt ; the compression of risk spreads, which has contributed to low long - term yields ; and the potential financial fallout from geopolitical events. i am sure that you yourselves are closely evaluating what these and other matters imply for the insurance industry. consider, for example, the effect of low long - term interest rates on the insurance sector. low interest rates may have induced some firms to take on extra exposure through investment in higher - risk assets, including complex or less highly - rated credit products. in some cases, mainly outside the united states, insurers have had difficulty earning sufficient returns to meet the minimum rate they have committed to pay to policyholders. generally, however, the industry seems to be increasingly focused on better matching the risk characteristics and duration of assets and liabilities. in fact, this better match may be one factor supporting low yields on longer - dated fixed - income assets, at least in some markets. but there are other potential explanations for the low long - term rates now prevailing in many countries. these other explanations include an excess of desired global saving over desired global investment spending and a decline in the risk premia demanded by investors, with the latter likely due in part to a marked decline in the volatility of economic activity and inflation. suffice it to say, we do not have a full understanding of the complex forces that have driven rates down, and the topic is likely to be debated for some time

is the perception that the financial industry is suffering from regulatory overload. this perception arises partly because of a bunching of regulatory initiatives in recent years. but concern about a more continuous accumulation of regulation over time has also arisen. of course, regulations that improve the strength and integrity of the financial system justify an element of regulatory burden. at the same time, the costs and benefits of new regulations need to be carefully weighed against each other, taking full account of financial industry input. industry commentary has already resulted in significant and beneficial changes to regulations and directives. i encourage firms to continue engaging actively and early with regulatory authorities on the range of international regulatory and legislative developments to ensure that the authorities have the full benefit of your expertise as they set policy. all these changes mean challenging times for both industry participants and regulators. companies must keep up with changing regulations and reporting requirements and must allocate part of their limited time and resources to dealing with them. regulatory resources are stretched as well, and i understand many regulators are working hard to ensure that the intensity of regulatory implementation efforts does not divert resources from ongoing supervision. regulators and industry participants will have to work together to meet these challenges. we must recognize, however, that regulatory initiatives also reflect a more complex environment. governments and the public at large understandably want to ensure that safety and soundness are maintained despite complexity. the intricate challenge here is to find the right balance between regulation, on the one hand, and the fostering of industry - led solutions through improved risk management and market practices, on the other. i should like to say that the fsf fully supports the role of the iais as the global standard setter for the insurance and reinsurance industry. we also commend the iais on the good work it has been doing in developing principles, standards, and guidance on insurance and reinsurance supervision and in promoting their implementation. this work contributes significantly to improved supervision of the insurance industry, to the development of well - regulated insurance markets, and to global financial stability. the naic has been active in monitoring discussions and reviewing and commenting on insurance regulatory and supervisory papers. i have no doubt that, given the importance of the coming initiatives, the naic will continue to do so. conclusion ladies and gentlemen, it has been my pleasure to set out some thoughts about several issues you will debate at this symposium. i think that you will agree with me on the need for effective supervisory collaboration, for enhanced transparency, for public disclosure, and