. we will continue to discuss with the industry on the design of insurance products and insurance arrangements that will specifically meet the growing needs of our people. the insurance act 1998, now more than 20 years old, is undergoing a review with the technical assistance of the imf, with the aim of modernising the legislation to incorporate recent industry developments and supervisory practices. these developments include exploring the fronting arrangements, the possibility of allowing captive insurance frameworks, and further clarity around the legal provisions for inclusive insurance. honourable members, we continue to see the effect of natural disasters locally and globally, evidenced by the vivid images of devastation caused by the current australian bushfires, the recent earthquake in puerto rico that is claimed to have changed the landscape of the country, and for us, the expectation that fiji may be in the path of a number of tropical cyclones in the remainder of the current cyclone season. the magnitude of economic and social losses caused by these natural disasters reiterates the importance of not only having adequate insurance coverage in place but also enhancing insurance affordability. there is indeed an ongoing need for the industry to not only promote insurance awareness to the general public, but to also develop and offer innovative insurance solutions that meet the needs and affordability of all fijians. the reserve bank is committed to continue work on the necessary initiatives to achieve such outcomes. honourable chair and members, thank you again for this opportunity to discuss the 2018 report with you, and we welcome any questions that you may have. reserve bank of fiji 16 january 2020

six months after lehman brothers collapsed world trade fell by nearly 20 % – a faster decline than in the great depression. around the world, the same telling phrase was repeated : economic activity was “ falling off a cliff ”. in its statement to the london g20 summit in april 2009, the international trade union movement argued that “ the first priority for g20 leaders must be to restore confidence by halting the freefall in world growth ”. that has been achieved. world output grew by 4 % over the past year. and in the united kingdom, growth has been somewhat faster than anticipated a year ago. nevertheless, total uk output remains around 10 % below where it would have been had the crisis not occurred. so how do we prevent this happening again? if we are to prevent another crisis, action is required on both of the fundamental causes. first, we need to resolve the problems caused by massive capital flows from poor to rich countries. yet the imbalances are growing again. this problem can be tackled only by international cooperation – most obviously through the g20 – and i hope that the trade union movement will continue to engage with that process. second, our financial system needs radical reform. slowly but surely, we must move towards a banking system that does not put both the economy and your members ’ livelihoods at risk. in the long run, banks will have to hold much more capital and be much less highly leveraged. part of the answer is improving the way we regulate banks, and devising policy tools to control the risks taken by the financial system as a whole. the aim should not be to prevent all bank failures. just as with every other company in the economy, banks that get it wrong must be allowed to fail, without risk to ordinary depositors or taxpayers. in 2008, banks were bailed out not to protect them but to protect the rest of the economy from the banks. that may not seem fair – and it isn ’ t – when other companies, such as jaguar, had to stand on their own feet or go to the wall. so banks too must face market discipline. but we need to do more than reform our banking system. if the world economy needs rebalancing, so does our own. the substantial trade deficit over a number of years means that national spending exceeded production. we need a higher national saving rate, a shift in spending and production away from consumption and towards exports. and a key part of that is a reduction in our budget deficit