, and in spain in september 2007. and this is not simply a problem affecting advanced economies : the problem is just around the corner for some emerging economies like korea, china, and brazil. population ageing is likely to have a significant impact on financial services, and requires a new policy response. here i would like to raise two issues : one is the necessity of cross - industry and even cross - border coordination, and the other is the question of how to deal with the fundamental uncertainty surrounding population ageing. necessity of cross - industry and cross - border coordination let me first consider the necessity of cross - industry and cross - border coordination. as a society begins to age, its older citizens become the dominant holders of financial assets. for example, see nishimura, k. g., and e. takats, “ ageing, property prices and money demand ”, bis working paper no. 385 ( 2012 ). bis central bankers ’ speeches however, with the coming of age, many people are likely to become risk - averse in managing their financial assets, for natural reasons. thus, a mature economy, with its lower growth potential due to ageing, faces the serious problem of how to provide risk money to promising sectors of the economy so as to encourage entrepreneurs ’ sound risk - taking and enhance value production. to be more specific, financial products and services should enable older citizens to maintain their quality of life and help foster an environment where longevity is seen as a gift, rather than a risk. these products, in addition to retirement savings, are expected to play diverse roles. given the improved average health of senior citizens in many countries, it is increasingly important that these financial products and services help the older population stay active and contributing to the community to the best of their abilities, while mitigating age - related risks such as illness. to provide such products, financial institutions must cooperate with other industries to take full advantage of their advanced technologies and expertise. at the same time, financial institutions should utilize their own expertise to measure, distribute, and manage the various risks as intermediates between asset - rich older citizens and prospective entrepreneurs. these attempts inevitably involve “ cross - industry ” elements. furthermore, with the transition from a growing economy to a mature economy, it is natural for people in an ageing economy to pursue higher returns by investing their savings in growing overseas economies. thus, it is also important for a mature economy to make full use of the benefits of cross - border transactions while

referendum and, for another, the uk still needs to meet the exchange rate criterion for joining the monetary union. let us take a closer look at these obstacles. first of all, the british government will have to convince the people of the importance of membership. this will be possible if the advantages are presented in a convincing way, since the idea of joining monetary union is no longer an unfamiliar one. but the exchange rate criterion, which applies for countries in search of emu membership, is another, more complex and more formal, matter. countries wishing to join emu on 1 january 1999 are required to have taken part in the exchange rate mechanism of the european monetary system for the last two years, without the fluctuation margins being exceeded. countries joining at a later stage are basically subject to the same rules. but the exchange rate mechanism which will take effect as from 1 january 1999 differs from that currently in force. in my opinion, erm2 will replace erm1. but legally, it is not that simple, and my view is not shared by everyone. for the time being, the uk is not making any moves to join the new exchange rate mechanism. i understand the uk ’ s reluctance to join erm2, considering its unfortunate experience with erm1. although the uk only joined erm1 in 1990, it was already forced to leave in 1992. naturally they feel that the experience does not bear repetition. but the circumstances prevailing at that time, viz. an excessively high entry rate for sterling and, more importantly, a macroeconomic policy which did not fully support the exchange rate objective, are in no way comparable to those in evidence in the uk and europe today. - 3now let us take a look at britain ’ s cyclical conditions and economic policy. the exchange rate movements of sterling largely reflect the cyclical divergences between the uk and the european continents. i already noted, it is crucial to british participation in emu that, in the longer term, its economic development does not diverge substantially from those in europe. the uk ’ s economy has always been subject to greater turbulence, and its business cycle is invariably ahead of those on the mainland. but the cyclical outliers seem to be decreasing. it is gratifying to note that the political stop - go cycle of interest rate policy has made way for a monetary policy aimed at keeping inflation under control. the government ’ s economic policy is now also directed at putting a stop to the