While stimulative monetary policy is needed to support the global economic recovery, this “low-for-long” scenario creates risk for the global financial system, and for the pension industry in particular. As you know, institutional investors such as insurance companies and pension funds are often expected – or in some cases even required by contract or mandate – to deliver a target rate of return.
This has been reflected by impressive and - until last year - sustained economic growth in the emerging markets. It is true that globalization is bringing several new challenges but, overall, the advantages for people throughout the world are clearly prevailing.