only time will tell. but as a central bank in a small open economy we have to take the world as we find it. while we might wish it were otherwise, we can ’ t ignore these global trends and their impact on our economy. so, the board is watching these global developments. domestically, the board today discussed how the australian economy appears to have reached a gentle turning point. the economy has been through a soft patch recently, but we are expecting a return to around trend growth over the next year. there are a number of factors that are supporting this outlook. these include the low level of interest rates, the recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets, and a brighter outlook for the resources sector. together, these factors provide a reasonable basis for expecting that the economy will remain on an improving trend from here. the board has also been paying close attention to the labour market. over recent years, employment growth has consistently surprised on the upside, which is good news. at the same 1 / 4 bis central bankers'speeches time, the strong demand for workers has been met with strong growth in the supply of available workers, with the participation rate now at a record high. partly as a result of this flexibility on the supply side, unemployment is a little higher than it was at the beginning of the year, and there has not been much upward pressure on wages. in turn, this has contributed to the extended run of inflation outcomes below the medium - term target range. in considering these developments today, the board decided that it was appropriate to ease monetary policy further. we are seeking to make more assured progress towards both full employment and the inflation target. we still expect to make progress on both fronts, but that progress is slower than we would like. today ’ s decision will help. in reaching that decision, the board recognises that the impact of monetary policy on the economy has changed over time, and that there can be some undesirable side effects from low interest rates. the many people who write to me saying how low interest rates are hurting their finances serve as a constant reminder of this. but, importantly, the board also recognises that monetary policy still works. it works to support employment, jobs and income growth across the economy. today ’ s decision, together with our decisions in june and july, will assist on each of these fronts. in doing so, these decisions will promote the collective economic welfare of the australian

nout wellink : challenges and opportunities for corporate pension fund management speech by dr nout wellink, president of the netherlands bank and chairman of the basel committee on banking supervision, at hoofdkantoor shell, den haag, 26 june 2007. * * * the organizers have asked me to contribute to this seminar in honour of peter bronkhorst, who is stepping down as managing director of the shell asset management corporation. in view of peter ’ s outstanding contributions to the dutch pension business in general, and to that of shell in particular, i decided to agree to this request. an additional reason, of course, is that this is an excellent opportunity to address a prominent group of asset managers. although it is tempting to resort to breezy lightheartedness on a festive occasion such as today, i have opted for substance, as peter bronkhorst is widely known as a man of content and professionalism. given today ’ s theme – challenges and opportunities for corporate pension fund management – i would like to discuss some challenges that pension funds have recently encountered. more specifically, i would like to explore how company pension funds have dealt with these challenges in the netherlands and in the us. in this respect, it is interesting to compare the dutch corporate pension industry with its american equivalent, as they have chosen different routes to cope with the increasing burden of aging : whereas the americans have individualized their pension system to a large extent, collectivity was preserved in the netherlands. in evaluating these different routes, i will emphasize four key messages. first, i will argue that a clear separation between a sponsor and its pension fund is a desirable feature of any pension system. second, i will point at the added value of collective pension plans over individual ones. third, i will argue that this collective nature saddles pension fund asset managers with an important social mandate. and fourth, i will also point at an opportunity in the pension delivery market, which i challenge you to seize. comparison of the dutch and american pension system since most of us are more familiar with the dutch pension system, i will start with a brief overview of the american system. the us pension system is characterized by a relatively small governmentimposed pay - as - you - go system. this benefit constitutes only 45 percent of total retirement income in the us. here, the netherlands and the us are comparable. indeed, the dutch state pension scheme is also fairly small, as it provides the average employee with about 50 percent of