Having said this, I should also stress that while this demographic phenomenon is a more or less inevitable outcome of people’s choices reflecting increasing living standards, it is not synchronous across countries. Comparing Japan and Turkey in the next slide (page 28), you can see that the inflection points are roughly 40 years apart, or one and a half generations.
In this sense, the existing prudential framework failed to take account of the growing systemic risk arising from the sustained boom in credit and asset prices that occurred between 2002 and 2007. The lesson was clear: prudential policy should take more account of macro-financial risks as well as the micro-financial risks specific to individual banks.