of caution are in order. one source of concern is that not only public debt ratios but also future expenditure commitments are already very high. this is because many public programmes, such as pension systems, will require more funds as the population ages. another concern is that tax revenues from traditional instruments such as income and consumption taxes may be lower, among other reasons because of the compositional effects associated with lower effective tax rates for older people. moreover, conventional fiscal stabilisers that rely on progressive income taxation and transfers may become less effective. since there are good reasons for not relying on discretionary fiscal measures for stabilisation purposes, there might be a need for alternative instruments such as the so - called “ semi - automatic stabilisers ”. these are fiscal instruments that involve tax reductions or increases in transfers and that automatically come into play as the economy goes into recession. finally, population ageing might also erode the effectiveness of fiscal multipliers since differences in the marginal propensity to consume over the life cycle make consumption by the old less responsive to fiscal transfers. as for macroprudential policies, they can also be used as an additional macroeconomic stabilisation mechanism. indeed, the introduction of macroprudential instruments to complement the stabilising capacity of monetary and fiscal policies is probably one of the most significant advances in the wake of the international financial crisis. for the countries belonging to a monetary union, the introduction of these tools is particularly important. this is because it is one of the few instruments available at the domestic level to ensure the stability of the domestic financial system. in particular, some instruments, such as the countercyclical capital buffer, can be used to build up capital buffers at financial institutions in good times that can be deployed when conditions worsen. the use of macroeconomic stabilisation mechanisms, such as the ccyb1, is particularly significant in a setting, such as the present one, in which monetary policy scope is more limited. a relevant issue in this regard is the extent to which these macropudential measures are complementary or substitutive with respect to monetary policy instruments. for instance, the activation / deactivation of a countercyclical capital buffer may weaken / increase the impact of expansionary monetary policy measures, as it may have a negative / positive impact on credit supply. countercyclical capital buffer implications for the financial system let me now briefly discuss the potential implications of ageing for the financial system.

dependencies on technology. all countries of the world, therefore, need to address the y2k problem and its potential effects on their domestic financial markets. in some cases, it is said that computer systems in particular countries are not much affected because their national calendars are not based on the conventional gregorian calendar used in the united states and many other countries. i do not derive much comfort from these statements because in most cases operating systems and the software applications running on them count internally with a conventional date system that may not be y2k - compliant. these systems typically also need to connect and interact with other systems that use conventional dates, so these interfaces must be tested for y2k - compliance. more broadly, mere assertions that computer applications are unaffected cannot be seen as a substitute for the rigorous see testimony of governor edward w. kelley, jr. before the committee on commerce, science, and transportation, u. s. senate. april 28, 1998. assessment, remediation, and testing efforts that should be undertaken by financial market participants worldwide. the increasing extent of cross - border, financial - market activity has been much remarked on in recent years. perhaps less well known is the fact that this activity is dependent on a large, geographically diverse, and highly computer - intensive global infrastructure for each of the key phases of this activity - - from trade execution through to payment and settlement. as an example, consider the daily financial market activities of a hypothetical us - based mutual fund holding stocks and bonds in a number of foreign jurisdictions. such a mutual fund would likely execute trades via relationships with a set of securities dealers, who themselves might make use of other securities brokers and dealers, including some outside the united states. the operational integrity of the major securities dealers in each national securities market is critical to the smooth functioning of those markets. in addition, securities trading in most countries is reliant on the proper functioning of the respective exchanges, brokerage networks, or electronic trading systems and the national telecommunications infrastructure on which these all depend. financial markets today are also highly dependent on the availability of real - time price and trade quotations provided by financial information services. for record - keeping, administration, and trade settlement purposes, our hypothetical mutual fund would also likely maintain a relationship with one or more global custodians ( banks or brokerage firms ), who themselves would typically maintain relationships with a network of sub - custodians located in various domestic markets around the world. actual settlement of