Sources of finance are increasingly diversified between banks and markets, helping to keep the cost of finance low. And the system is demonstrating an ability to dampen shocks rather than amplify them. Despite this transformation, there are nascent risks that, if left unchecked, could reverse the progress made and ultimately undermine the G20’s objective of strong, stable and balanced growth. Indeed, the global financial system is at a fork in the road. On one path, we can build a more effective, resilient system on the new pillars of responsible financial globalisation. On the other, countries could turn inwards and reduce reliance on each other’s financial systems. That would, in turn, fragment pools of funding and liquidity, reduce competition and impede cross-border investment. The net result would be less reliable and more expensive financing for households and businesses, and very likely lower growth and higher risks in all our economies. 3  The British Social Attitudes Survey (2013) reported that only 20% of UK citizens now think banks are well-run, down from 90% in the late 1980s. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  The outcome of the Brexit negotiations could prove highly influential in determining which path the global financial system takes.
4  BIS central bankers’ speeches  •  Foreign labour, which had driven Singapore’s labour force growth since the late 1970s, was already one-third of the total workforce. •  It was neither economically efficient nor socially desirable to allow the foreign workforce to expand much faster than the local workforce. By 2020, average total labour force growth was down to 1% per annum. The central thrust of economic strategies in the 2010s and early 2020s was therefore to shift to a productivity-driven growth model. The aim was to increase productivity growth to at least 2% per annum, from the 1.4% averaged during the 2000s. •  The growth of lower-skilled foreign labour was curbed through increases in the foreign worker levy and reductions in the foreign worker dependency ratio ceilings. •  Financial incentives were given to firms to undertake capital deepening and adopt technology solutions to raise productivity. •  Programmes were put in place to help Singaporeans develop and master skills in new growth clusters. While the manufacturing sector had continually undergone restructuring and moved up the value chain in the preceding five decades, this was the first time the entire economy was undergoing such a transition. •  It proved particularly challenging for many traditional domestically-oriented services like retail, hospitality, construction, real estate, and social services, which had come to be heavily dependent on cheap labour over the decades.