First, given the length of the foreclosure process, realised losses on the sub-prime mortgages which underpin securities may not total much more than $ billion so far. Second, if projecting forward the rate at which delinquencies are cumulating on recent vintages of subprime mortgages, we can estimate that losses on the securitised loans might ultimately exceed $ billion. Thirdly, using the sub-prime ABX indices to “mark-tomarket” sub-prime securities, can produce figures of $ to 400 billion. Against these figures, international banks have so far announced writedowns (net of hedging) of $ to $ billion. •  Although these are huge numbers, they amount to less than 1% of the total assets of the Large Complex Financial Institutions (LCFIs) in the US and Europe. In relation  2  BIS Review 24/2008  to GDP, even the higher estimates would be comparable to the losses in the Savings and Loans crisis. 2 •  But the securitisation model has not just made it difficult to scale the problem; it has added a large measure of uncertainty and opacity to the distribution of losses and that is a key factor in the continued reluctance to lend and the closure of most ABS markets. The current worries on the future of the monoline bond insurers reflected in their CDS prices in Chart 6 are exacerbating the uncertainties about individual banks’ exposures. The third factor is the dislocation of the investor base for ABS. Since the summer many of the main buyers of ABS have withdrawn from the market.
First, financial inclusion is an international agenda that has captured the attention of many governments which has national importance The 2.5 billion unbanked and underserved remains a global challenge. A significant portion of them are from countries with predominantly Muslim population, thus there is an urgency to address imbalances among the “ummah”. For comparison, 2.5 billion people is equal to the population of China and India combined or is equal to 8 times the population of USA. Financial inclusion can only be achieved with the collective effort of all countries. Peer-topeer learning and sharing of best practices can help countries leapfrog the trial and error stages in designing and implementing financial inclusion policy, without having to reinvent the wheel. For example, when we introduced microfinancing, we made a tour to Indonesia to learn about how Indonesia actually implemented microfinancing. With that knowledge, we implemented microfinancing in Malaysia and it has been very successful. When we wanted to introduce agent branch banking, we went to Mexico and Brazil to learn on how they actually use agent branch banking as effective means to expand financial services. We learnt and implemented some of the measures on financial inclusion. We avoid unnecessary mistakes and reduce cost in implementing of those policies.