services agency ( fsa ) of customers'total return on investment trusts ( after fees and commissions ) suggest that, as of end - march 2019, 34 percent of customers of all investment trust distributors face negative total returns. 28 given that the average holding period of such funds is thought to be around three years and that stock prices in major countries have risen during that period, including in japan, where the nikkei 225 stock average has risen by around 25 percent, the return on most funds should be positive. this means that the negative returns must be due to high fees and commissions. as highlighted by the fsa, some of the distributors of investment trusts seem to be encouraging their customers to churn between funds in the short term to gain profits from transaction fees. 29 moreover, looking at the costs and returns of investment trust funds by type of distributor, i find that banks and securities firms engaged in face - to - face sales tend to sell trusts involving high costs and low returns. in contrast, independent investment trust firms and securities firms specializing in sales via the internet tend to sell trusts at a lower cost and that offer higher returns. 30 see, for example, the 2 - day series, minami takero and nakatani shogo, " chigin haran jinzai kokatsu no kiki, " nikkei, february 20 and 21, 2019. 28 for details, see financial services agency, " publication of the monitoring results pertaining to the implementation status of customer - oriented business conduct taken by financial institutions " ( the full text is available only in japanese ), november 2019, https : / / www. fsa. go. jp / en / newsletter / weekly2019 / 367. html. in fact, this situation where customers are making losses in their investment trusts has even made it into works of fiction, such as shairokku no kodomotachi ( p. 16 ) by jun ikeido, mentioned earlier. 29 toshihide endo, " to turn challenges into opportunities, " speech at the 34th annual general meeting and reception of the international bankers association of japan, financial services agency, november 2018. 30 see footnote 28 for the reference. some financial institutions in europe, where interest rates also are low, are in the process of significantly enhancing their business efficiency due to the prolonged sluggishness of profits. since drastic employment adjustments in europe seem to be difficult due to factors such as labor practices, some financial institutions are revising their organizational

graeme wheeler : the building blocks of the economic expansion speech by mr graeme wheeler, governor of the reserve bank of new zealand, to the canterbury employers ’ chamber of commerce, christchurch, 31 january 2014. * * * introduction small open advanced economies like new zealand tend to have economic cycles that are heavily influenced by developments in the global economy. we saw this when our growth rate slowed during the asian financial crisis in the late 1990s and the collapse of the dot - com bubble in the united states three years later, and, most recently, during the global financial crisis ( gfc ). over the past two years our economy has outperformed most of the advanced economies. our growth rate has averaged 2. 7 percent, or twice the average of the group of 35 advanced economies in the imf classification. most of our economic indicators are positive with the terms of trade at a 40 - year high, business confidence is the strongest since 1993, and consumer confidence is at a seven - year peak. this afternoon, i would like to offer some thoughts on the reasons for our stronger economic performance, and discuss the nature of the expansion and the challenges facing the reserve bank in helping to ensure that the expansion can be sustained. 2008 – 2011 : four difficult years although new zealand experienced a shallower recession than most of the advanced economies during the gfc, the economy has faced many difficult adjustments in recent years. these include : the liquidation of over 60 finance companies beginning in 2006 and 2007 ; the collapse of global trade in 2008 and 2009 ; droughts in 2008 and 2012 ; and the devastating canterbury earthquakes in 2010 and 2011. the earthquakes, in particular, had a profound human and economic impact that will continue to be felt for many years. on a global scale, the canterbury earthquakes are among the 10 costliest natural disasters in recent history. relative to the size of the economy, the earthquakes are the most severe natural disaster faced by an advanced economy in recent times ( table 1 ). 1 natural disasters in developing countries have in several cases been more deadly and had a larger cost relative to gdp than disasters in the advanced economies, even if insured losses have been low. for example, the 2010 earthquake in haiti is estimated to have a death toll of over 220, 000 and an economic cost of over 100 percent of haiti ’ s gdp. bis central bankers ’ speeches in canterbury, businesses closed, residents moved away, and foreign students and tourists stopped coming. businesses that exported or competed against imported goods and services also faced