a traditional broking context, and that of the broker which may seek to protect relationships with insurers that it has dealings with in a different context. brokers engaged in risk consulting activities may also have strong incentives to increase commission revenue by inappropriately influencing clients to purchase more insurance than they need or which do little to provide meaningful protection. in malaysia, these issues are coming into greater focus with growing demand for valueadded services that brokers can provide. we do not believe that disclosures alone are sufficient to mitigate the risk of conflicts. we have presently required brokers to limit the revenue earned from these activities to 20 % of total revenue in the previous financial year. we are also insisting on strengthened procedures and controls within brokers to manage conflicts. and we are asking brokers that engage in additional activities to demonstrate to us that their core broking responsibilities have not been compromised – including in terms of the adequacy of competent resources performing core broking functions, the quality of infrastructure supporting core broking activities and the outcomes produced for broking clients. this is also a time for the industry to come together collectively to raise the bar on standards of professional ethics and conduct that must be demonstrated towards clients. such a code needs to clearly address new business realities and changing expectations of the industry. and it should have credibility by ensuring swift and effective mechanisms for addressing complaints on breaches and the ability of the profession to act against errant members. in malaysia, avenues for customers to address disputes with insurance brokers are being enhanced with establishment of a financial ombudsman scheme that will include insurance and takaful brokers as members of the scheme in the later part of this year. in closing, the insurance broking sector finds itself today at the threshold of an exciting, but also challenging, new era in which solutions of the past are unlikely to be adequate for the demands of the future. the stakes are higher, and the time is ripe for insurance broking in this region to do its part to contribute to sustainable growth. thank you very much and i wish you all very constructive and enlightening discussions ahead. bis central bankers ’ speeches

’ s unique institutional set - up, a set - up that easily leads to simple, but faulty analogies with other economies. as you are well aware the euro area pairs a common monetary policy with 17 national fiscal policies. firstly, this combination gives rise to a deficit bias, as it allows costs to be shifted partially on to others. if a worsening fiscal position in one country has repercussions for our monetary union as a whole, others may step in and bail out. and, secondly, central banks ’ balance sheets can serve as a conduit for shifting risks among national taxpayers, even if there are no explicit fiscal transfers. the founding fathers of the euro foresaw this risk. precautions were taken in the form of the prohibition of monetary financing of government deficits, price stability as the primary objective, the no - bail - out clause and the stability and growth pact that was to give teeth to the rules on sound public finances enshrined in the maastricht treaty. however, the fiscal rules were breached numerous times, not least by germany and france. in addition, investors made hardly any distinction between the bonds of individual member states – i leave it to you to decide whether this was because they neglected the growing differences in the economic fundamentals or because they never really believed that the no - bail - out clause would hold once the going got tough. while the provisions against unstable fiscal positions proved to be insufficient, the institutional framework took no account of other macroeconomic imbalances. risks stemming from divergences in competitiveness or exaggerations in national real estate sectors were not considered in the design of the european monetary union. hence, even countries that had impressive fiscal data before the crisis ran into deep trouble once the enormous implicit liabilities in their banking sectors became apparent. ireland, unfortunately, was one of those countries. assessing the irish economy in 2007 the imf – which i quote for convenience, not to blame it – wrote : “ fiscal policy has been prudent, with a medium - term fiscal objective of close to balance or surplus, in line with fund advice. in the past couple [ of ] years, windfall property - related revenues were saved and the fiscal stance was not procyclical, in line with fund advice ”. however, once the risks in the financial sector materialised and the government had to step in, irelands fiscal position deteriorated very quickly. bis central bankers ’ speeches 3. the way forward to overcome