The existing risk management techniques worked well at predicting small day-to-day losses under normal circumstances but failed to predict severe losses that are very infrequent. However, it is exactly those severe losses that matter the most. Therefore, banks need to devote greater attention to their risk management.
Indeed, structural factors play a key role in the low prospects for growth. Calling for yet another reorientation of macroeconomic policies. Let me explain this in more detail in the remainder of this talk. Many countries have failed to adapt to the changing environment in recent decades, most importantly in terms of technological progress and globalisation.