In any case, there are differing appreciations about how it will resolve the tensions between the dynamics of the real sector, inflation and exchange rate conditions in the US economy. In Japan, the UK and Europe, the markets expect policies to remain as expansionary, or be even more so, considering their weak economic growth rates and projected inflation exceeding their central banks’ targets. 2 / 14  BIS central bankers' speeches  In this context, the fraction of fixed-income assets—including long term—with negative rates has increased considerably around the world. I draw your attention to this fact, because it was unimaginable some years back. Thus, higher risk appetite and the search for yield have pushed the prices of risky assets up, squeezing sovereign spreads and appreciating currencies vis-a-vis the dollar (figure 7). In any case, the intensity with which this change in financial conditions will impact activity or commodity prices is not so clear. In the baseline scenario, global activity projections do not change significantly. For the 2016–2017 biennium average growth in the world economy is expected to stand at 3.2%, while Chile’s trading partners should grow by 3.0%, also fairly unchanged from June. The terms of trade will deteriorate less over the projection horizon, although the trajectories foreseen for the prices of copper and oil are similar to those of June, expecting prices in 2018 of $ per pound of copper and around $ per barrel of oil (table 1). Locally, second-quarter data for domestic activity and demand confirmed bounded economic growth.
The availability of  longevity reinsurance has limited any drag on growth in the bulk purchase annuity market. Although one possible effect has been to make it more expensive for pension schemes with a high 5  The Chancellor’s letter to the Governor of 8 March 2017 setting out recommendations to the Prudential Regulation Committee (PRC) about aspects of the economic policy of the government to which the PRC should have regard when considering how to advance its statutory objectives includes “The government wishes to ensure financial services markets make a positive contribution to sustainable economic growth in the UK economy in the medium and long term, through the facilitation of finance for productive investment and as a productive sector of the UK economy.” 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  proportion of younger members to achieve an insurer buy out. This is because reinsurers have had a lower appetite for deferred than in-payment annuities. Although I hear that this might have changed recently. As Sam Woods wrote to Nicky Morgan in June of last year6, the PRA does not currently see a durable way to implement a change in the risk margin with sufficient certainty for insurers to be able to rely on it for pricing, capital planning and use of reinsurance. We continue to keep this position under review. Current issues Despite the diversification into direct investments, corporate bonds are likely to remain the largest category of assets backing U.K. insurers’ annuity liabilities.