in a sustainable manner. state bank of pakistan is pursuing a multi - pronged financial inclusion strategy through the following : 1. sbp introduced basic banking account ( bba ), requiring commercial banks operating in pakistan to offer bba to facilitate and provide basic banking facilities to the low income people in pakistan. a typical bba can be opened with a minimum deposit of rs1, 000 carrying no fee, no limit of minimum balance and offering full atm facility. 2. sbp has introduced the annual branch licensing policy which requires commercial banks with 100 branches or more to open at least 20 % of their branches outside big cities and set up branches in tehsil headquarters where no branch of any bank exists. bis central bankers ’ speeches 3. sbp has developed a world class regulatory framework to enable commercial microfinance and branchless banking in pakistan. these regulations enable alternative approaches and models for delivery of pro - poor and low - income financial services and products while ensuring institutional viability, broadening access, financial integrity, and pro - consumer practices. 4. pakistan is amongst the few countries that have a national microfinance strategy which not only identifies drivers and bottlenecks to growth but also provides an implementation plan drawn alongside with industry stakeholders to monitor progress against the identified targets. 5. sbp has partnered with the uk department for international development ( dfid ) and other donors to launch programs to increase access to finance in the country. the dfid - funded financial inclusion program ( fip ) aims to address financial exclusion through a variety of interventions. fip focuses on market - based, sustainable financial services for low income people and small enterprises. in addition, fip aims to enhance delivery of financial services through technology based branchless banking solutions, financial innovation, and remittances. fip has provided support to a number of initiatives to enhance supply of and access to finance for smes, agriculture, and microfinance sectors. fip interventions largely focus on addressing market failures and industry bottlenecks, while addressing issues of fair treatment of clients and consumer protection. here, i would like to make specific mention of some of the breakthrough fip initiatives on promoting responsible finance in the microfinance sector : • fip is supporting the establishment of a separate national level credit information bureau for microfinance clients. once the mf - cib is fully functional, it would hold the credit histories of mf borrowers addressing the fundamental issues of asymmetric information on mf clients

potential output? the decline in the working age population due to ageing should negatively affect potential output in the long run, through the decrease in the labour force contribution and productivity, all other things being equal. i must stress here that france has a specific advantage : its population is expected to keep on growing fast for some decades thanks to a relatively high fertility rate and a dynamic migration policy ; while our german neighbours for instance are on a decreasing trend. overall, based on european commission projection trends, we estimate that the expected decline of 1. 5 % in the working age population in the european union between 2010 and 2020 could take 1 percentage point off its potential output. but there are ways to offset this evolution. a rise in the participation rates of the young, seniors and women is one of them. pension and labour market reforms implemented in europe are certainly a step in the right direction and should be further pursued. bis central bankers ’ speeches provided that the necessary reforms are implemented and that some changes in working habits are made, we expect that the euro area will be able to cope reasonably well with the expected fall in the population and working age population over the long run, notably in terms of the potential growth rate. nevertheless, ensuring that public spending dynamics remain sustainable in the face of population ageing will continue to be a challenge, given the current debt situation in europe. 2. impact on savings and investment how are savings likely to evolve, both in terms of levels and structure? levels of savings if we follow the consumption smoothing theory, individual savings behavior is driven by the life - cycle : individuals tend to increase their savings as they earn more and then decrease their savings until they actually become negative when they retire and earn less, thus leading to a hump - shaped pattern for their accumulated wealth. consequently, as the proportion of the aged population increases, private savings, as a proportion of income, should decrease. however, this decline may be gradual with the negative impact of ageing on the levels of savings prevailing in the longer run. structure of savings in terms of structure, the fact that elderly people account for an increasing share of the population could change savings habits and have an impact on the demand for certain classes of assets. in particular, given that elderly people are more risk adverse, this could increase the already high demand for low - risk assets. investment the standard production function exhibits two productive inputs : labour and capital. if the labour force tends to decrease or decelerate because of demography, then the