Dear Friends, in today's economic climate it is more important than ever to be financially literate. During a recent press conference at which I introduced our Financial Stability Review, I quoted Warren Buffett's poignant phrase: "only when the tide goes out do you discover who's been swimming naked".
He referred to the risks investors take that only get tested and become visible during tough times. This wisdom applies to households too. For two decades, inflation and interest rates were low and stable. Households were optimistic about their job and income prospects.