the south african economy with that of africa. this will indeed be beneficial through boosting interregional trade, investment and capital flows, and allow the domestic economy to tap into the more vibrant growth rates being experienced in the rest of sub - saharan africa. it is estimated that an effective integration with the sub - continent could add as much as 1, 5 per cent to south africa ’ s growth rate. furthermore, south africa should capitalise on its comparative advantages, related to physical, financial and telecommunication infrastructure to attract international firms with the aspiration to gain a foothold in africa. a study, recently conducted by the world bank, identified three areas of opportunity to improve this country ’ s export competitiveness, namely, boosting local competition by opening south african markets to domestic and foreign entry ; promoting deeper regional integration in goods and services within africa ; and alleviating infrastructure bottlenecks. this brings us to the second factor which would meaningfully enhance south africa ’ s growth potential, namely the forceful implementation of the r1 trillion infrastructure expenditure programme of government. through multiplier effects, and in terms of job creation, especially with regard to the promotion of low - skilled jobs, economic growth can be materially enhanced. several studies have shown that investment in economic infrastructure has the potential to act as one of the most effective policies in terms of promoting economic growth. employment is created during the construction phase of such infrastructure projects, as well as during the operational life thereof. moreover, the key driver of private sector investment is public sector investment as it inspires both business and consumer confidence. a combination of these two driving forces has the potential to easily boost south africa ’ s growth to rates well in excess of current levels, putting this country on a higher road to economic prosperity, thus hopefully reducing unemployment levels, poverty levels and the degree of inequality. i further believe that it will positively contribute to further restore the dignity of our fellow south africans. south africans at times can tend to be fairly pessimistic. the challenges we face are immense, but not dissimilar in scale and extent to those faced not only by developing economies but also developed economies. i however choose to be optimistic and do believe that we have many factors that do count in our favour and am convinced that with the right policy choices we can go a long way towards successfully addressing the triple challenges of structural unemployment, poverty and inequality. i thank you. bis central bankers ’ speeches

close to zero and the major central banks have undertaken around usd7 trillion of quantitative easing. although the federal reserve has discontinued its bond purchase programme, global quantitative easing in 2015 is expected to be greater than at any time since 2011. bank bail - outs during the gfc have imposed enormous costs on taxpayers ( close to 30 % of gdp in the case of ireland ) and at home we saw the large fiscal costs associated with the support for south canterbury finance. sound prudential policies relating to capital adequacy, liquidity management, core funding, disclosure requirements, and stress testing of balance sheets cannot always prevent financial crises and the need for unconventional monetary policy, but they can lower the risk of systemic failure. dincer n, and b eichengreen 2014 “ central bank transparency and independence : updates and new measures ” international journal of central banking. bis central bankers ’ speeches vii ) the emergence of macro - prudential policy one of the insights from the gfc was how rapidly instability could develop even though an economy might be growing close to its potential, and be experiencing sound fiscal policy and price stability. an environment of low interest rates, rising leverage, aggressive competition among lending institutions, and a widespread search for yield by investors usually translates quickly into rising asset prices – especially when the global economy is growing at a rapid rate, as was the case during 2003 – 07. when financial crises occur, asset valuations decline and the lower asset prices may be unable to support the debt that financed their acquisition. we are currently seeing considerable appreciation in asset prices ( including fixed income securities, equities, and real estate ) in many countries as a result of extensive monetary accommodation and investors aggressively searching for yield. many central banks and regulatory agencies have turned to macro - prudential policies in an attempt to reduce risks to financial stability, including those associated with an overheated housing market. in view of these concerns, the reserve bank introduced macro - prudential policy in the form of speed limits on high loan - to - value ratio ( lvr ) lending for existing residential property on 1 october 2013. house prices were already significantly overvalued based on historical and international indicators and were accelerating rapidly in auckland and christchurch ( which account for around half of the national market ) and gaining considerable momentum in several other regions. in addition, the ratio of household debt to household disposable income at 156 percent was high, and banks were competing aggressively to provide mortgages to borrowers with