israel ’ s education system is not efficient. various reasons may be put forward to explain this : a. israel does not have one education system, but several, including among others hebrew state education, arab state education, state religious, and a number of ultraorthodox streams, and some of them do not include basics such as mathematics, sciences and english in their curricula. b. these education systems do not have enough management flexibility, certainly at the school level. c. between 1995 and 2005 expenditure per student on elementary, secondary and tertiary education rose more slowly in israel than in the oecd countries. it is clear that a fresh approach is needed also in the field of higher education. in this context israel ’ s brain drain gives particular cause for concern. we need only look at the number of israelis in the faculties of the leading universities in the us and other countries. we must not sit back as passive observers of this trend, but should take steps aimed at changing this situation. promoting education should be high on israel ’ s list of priorities. if not, we will find our relative position deteriorating, and indeed, there are signs that this has started. this is one of the few subjects on which there is a consensus ; but the fact there is a consensus does not itself solve the problem. two committees have examined the issue and formulated comprehensive proposals – the dovrat committee in 2005, and the shochat committee in 2007. the implementation of their recommendations – including the introduction of differential pay for lecturers based on their achievements – should be advanced. investment in education is vital in the long term, economically, socially and culturally, and even from the security aspect : a. economically – education provides the infrastructure for rapid and sustained economic growth ; b. socially and culturally – formal and informal education is the key to the realization of individuals ’ potential, and also contributes to social mobility ; c. security – without good education to help boost and sustain growth, and without maintaining our technological edge, we will be unable to preserve our advantage in the field of security. it is because of the immense importance of education to israel ’ s long - term future that now is the time to push ahead with the implementation of the recommendations of the dovrat and shochat committees. nothing is more important for israel and its citizens, and that includes you and the coming generations. i congratulate you on your achievements and wish you every success in the future.

glenn stevens : risk and the macroeconomy address by mr glenn stevens, deputy governor of the reserve bank of australia, to the 2006 securities & derivatives industry association conference, melbourne, 27 may 2006. * * * i am pleased to be here in melbourne to take part in your conference. there seems no better issue to discuss with a group of securities and derivatives professionals than risk and its pricing. this is quite topical since, as you would be well aware, the extent of additional return paid to investors to take on risk seems to have been unusually low in recent years. there are several questions that naturally arise, and which i would like to address. first, how does the recent period compare historically? compensation for risk is low compared with the 1980s and 1990s, but what can we learn from a longer - run comparison? second, to what extent can it be claimed that the underlying economic outcomes, which presumably have a major bearing on investors ’ perceptions of risk, are less “ risky ” or volatile than they used to be? third, what are the odds that this apparently benign environment will persist? what factors might prompt a change? what is risk? to begin, it is perhaps important to be clear what we mean by “ risk ”, and how it differs from “ uncertainty ”, a distinction first made by frank knight 1 in 1921. he wrote : “ the practical difference between the two categories, risk and uncertainty, is that in the former the distribution of the outcome in a group of instances is known ( either through calculation a priori or from statistics of past experience ), while in the case of uncertainty this is not true, the reason being in general that it is impossible to form a group of instances, because the situation dealt with is in a high degree unique. ” risk can be priced, on the assumption that the probabilities in the future will be those inferred from the past. in peter bernstein ’ s 2 excellent book against the gods, the early development of thinking about risk is presented as arising from the study of games of pure chance – where the odds are precisely calculable. the classic response to the chance - like characteristics of life is insurance. actuaries draw up tables of life expectancy for a population based on historical experience, and insurance companies, with reasonable confidence, price policies. the probability and likely cost of certain other events – fires, car accidents, etc. – is sufficiently calculable that, over time, risk can be priced. in