With regard to India, the population bonus period will arrive around 2015, so its growth rate may accelerate further3. However, as Japan’s experience shows, when income levels increase together with strong economic growth, each society faces various new challenges. A smooth transition from high growth to stable growth is quite a challenge.
It will be absolutely essential to build trust among all parties, and especially between regulatory authorities. Much remains to be done in eliminating “too-big-to-fail”. The Federal Reserve is considering a requirement that systemic institutions maintain sufficient long-term debt at the parent company level to absorb losses and recapitalize operating subsidiaries in the event of failure.