current policy - making. this is clearly the case with macroprudential policies. indeed, macroprudential policy is a critical dimension of the public policy response to the crises we have experienced since 2008 and has figured prominently in the lessons we have drawn from them. let me mention three of these lessons. bis central bankers ’ speeches • first, the oversight of individual components of the financial system is not enough to preserve financial stability. having robust financial institutions is a prerequisite for ensuring financial stability but it is not in itself sufficient. • second, maintaining price stability does not guarantee financial stability. in the euro area, the inflation mandate has always been fulfilled, but has not prevented the emergence of crises in the region. these crises have forced central banks to broaden their mandates to include financial stability in order to ensure the functioning of the monetary policy transmission channel as well as to guarantee the smooth financing of the economy. stable inflation and financial stability are therefore two objectives that monetary and macroprudential policies respectively seek to achieve. • third, the lehman episode and the euro area crisis have confirmed that financial crises do not stop at borders. consequently, financial system regulation must be the fruit of international cooperation. these lessons, in the post - crisis world, are at the heart of policy - makers ’ actions. financial crises have led us to renew our approach to financial system regulation, and notably to supplement it with a macroprudential perspective. but what is a macroprudential policy? how can we define clear objectives? what are the policy instruments? how can we organise it? what imbalances need to be redressed? these are only some of the numerous issues that contributors address in this review. in particular, the broad scope of policy action is a major challenge. we especially need to anticipate all possible conflicts with other economic policies, such as microprudential, monetary or fiscal policy. i will now identify at least two prerequisites to ensure that macroprudential policy is effective : first, if conflicts arise between macroprudential policy should prevail. microprudential and macroprudential policies, we must be particularly vigilant about this point in order to ensure the overall macro - welfare of the economy and guarantee the smooth financing of the economy. for example, imposing stringent requirements on financial institutions during an economic downturn may not be an appropriate policy response. although it would reinforce the individual robustness of financial institutions, it

financial regulatory frameworks are more robust. and policymakers in asia are more prepared to make macro - policy adjustments as needed, including pre - emptive interest rate hikes to support exchange rate stability. the second risk to the global economy is rising protectionism. protectionism is rearing its ugly head on three trade fronts : us - china ; us - eu ; and usmexico - canada. thus far, the us has imposed tariffs on solar panels, washing machines, steel and aluminum imports from all major trading partners. it has announced tariffs of 25 % on us $ 50 billion of imports from china, and has threatened tariffs of 10 % on another us $ 200 billion of imports from china. both china and europe have announced retaliatory tariffs. the immediate effect of these trade restrictions is limited and does not threaten global growth … yet. the announced tariffs are estimated to shave around 0. 1 % point off china ’ s growth, with the us economy similarly impacted by china ’ s retaliatory measures. the real risks from the tariffs are spillover effects, escalation, and economic uncertainty — all of which could severely undermine global growth. first, spillover effects. the impact of the tariffs will be felt not only in the countries involved but across the value chains that span several countries. second, escalation. if tariffs are applied to a much broader range of goods, trade flows would be severely impaired and the impact on growth would be greater. third, uncertainty. the threat of further escalation is beginning to dampen business confidence and unsettle financial markets. if businesses around the world take a wait - and - see approach, the global recovery in investment could be curtailed. the world has clearly moved from trade tension to trade conflict. if this escalates into a trade war, all three engines of global growth — manufacturing, trade, and investment — will stall. bottomline : the global economy is still in good shape but the momentum has started to flag and tail risks have grown. so while global growth should be good this year, it may not be quite as good as last year. singapore economy against this global backdrop, the singapore economy is expected to remain on a steady expansion path in 2018. overall gdp growth is expected to come in at around 2. 5 – 3. 5 % in 2018. 3 / 11 bis central bankers'speeches the trade - related cluster — manufacturing, wholesale trade, transport and storage, making up about 45