17 I.2  Investment  Now that I have briefly described how population ageing is likely to induce a decline in domestic savings, let me turn to its effects on investment. The main determinant of investment is its expected real return. The productivity of physical capital is typically influenced by two main factors: technological progress and the capital intensity of the production process.
The BoU embraced the Risk Based Methodology, which mandates the Board with the responsibility to ensure that a sound risk management framework is in place. While these form good foundation for determination of the adequacy of the capital position based on the risk profile, the body of work is not yet complete.