regulators and to the government that will support the stability and proper functioning of the financial system. the bank of israel will lead and manage the committee ’ s work, and for that purpose, a division was established four years ago at the bank of israel to deal with the area of financial stability. that division will do most of the staff work of the committee and will support its activity. the discussion of financial stability is often considered something that serves the financial entities, but this is not so. maintaining financial stability first and foremost serves the customers of the financial entities, the economy, and the public as a whole. maintaining financial stability means that when we deposit our salaries in the bank, we can sleep quietly and be certain that we will be able to withdraw it whenever we want. it means that when we save for retirement, those savings will be available to us. and it means that when a business or factory owner receives a commitment, it will be honored. in conclusion, this is the first significant amendment to the bank of israel law in its new format 1 / 2 bis central bankers'speeches since the law was legislated through this committee seven years ago, under the committee chairman of the time, who is also the committee chairman now. i am certain that the discussions will be matter - of - fact and will lead to legislation that, in the end, will serve the public in the optimal manner. permit me to offer you, as we always do, the bank of israel ’ s professional assistance in this important legislative process. 2 / 2 bis central bankers'speeches

period. the price of psv assets is nearly four times higher in the globalization period ( period 3 ) than in the pre - globalization period ( period 2 ), leading to asset price inflation of 5. 28 % per annum. the number of young people in the market - economy world, who are saving for future retirement, increases substantially in the period of globalization. thus, we have a global “ savings glut, ” which leads to substantial asset price inflation globally. in the example of table 2. 3, the asset price inflation rate accelerated substantially, from 0. 89 % to 5. 28 % annually for twenty - five years. what will happen once the boom is over? let me extend table 2. 3 to include the postglobalization period, in table 2. 4. here the post - globalization period is represented by 2030, and all population figures are the united nations population estimates given in table 2. 1. if we look at period 4, the post - globalization period, we see that the market - economy world population will grow by only 0. 28 % annually from 2005 to 2030. under my simplified assumption, the young population in the market - economy world will produce about 2. 29 billion units of consumption goods, while there will be 100 million psv assets. this means the price of the assets will be about 22. 9 units of consumption goods in the postglobalization period, meaning that asset price inflation decelerates quite sharply. the asset price inflation of the post - globalization period is a mere 0. 28 %. in fact, the rate is lower even than the 0. 89 % of the pre - globalization period. summing up so far, i have suggested that the brute force of compositional change in population might be in the background of asset market bubbles and their subsequent bust, especially those which caused the global macroeconomic crisis of 2008 and after. to close this section, i would like to draw two observations from this exercise. first, i am not suggesting this demographic factor is the cause of the crisis, but pointing out that this favorable demographic background ( increasing inverse dependency ratio ) might have been fertile ground for the excessive optimism that led many economic agents to take a highly leveraged position to multiply their returns. by the same token, the eventual sharp reversal of the ratio made resolution of accumulated financial excesses particularly difficult, resulting in the prolonged, severe balance - sheet adjustment that followed the crisis, and which is still