Marine insurance had become a necessity for trade – without protection, a bad storm could overturn the entire fortunes of merchants. But a lack of safeguards paved the way for abuse. One particularly spectacular example involved John McDougall, a Glaswegian merchant, who arranged to have a ship called Friends (whose cargo was valued at £ deliberately shipwrecked off the coast of Denmark – but not before insuring his own stake in the voyage in five separate policies for £ and insuring the ship and other goods for £ in a further three policies. In total, he obtained eight policies on the same risk – spreading the deceit between unsuspecting underwriters across Glasgow, Dundee, Hull and London. In doing so, McDougall (and others like him), introduced a speculative spirit that threatened the more sober motives crucial to indemnification contracts 9. 7  4 Statutes of the Realm 978 (1547-1624). 8  Lewin (2003). 9  Clark (2004). 4  BIS central bankers’ speeches  Practices such as those described above ultimately led Parliament to take action. This first took the form of the Marine Insurance Act 1745, which rendered void marine policies made without an insurable interest. A similar provision was subsequently applied in relation to life insurance under the Life Assurance Act 1774. These Acts did leave a gap – namely, nonmarine indemnity policies. However this was filled when gambling contracts were rendered void by the Gambling Act 1845, as the existence of an insurable interest served to distinguish insurance contracts from gambling contracts.
Tarisa Watanagase: Rethinking monetary policy in a globalized world – coping with current challenges and beyond Remarks by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the Central Bank of Malaysia High Level Conference 2009, Kuala Lumpur, 10 February 2009. * 1. *  *  Introduction  I would like to congratulate Bank Negara Malaysia on its 50th anniversary, and the magnificent job the Bank has done both in the domestic and international arenas. I wish the Bank continued success in the next 50 years and beyond. Thank you for the opportunity to address this distinguished audience on a topic that is a current concern for all central bankers during these turbulent times. I would like to raise a number of issues which have challenged the traditional thinking behind monetary policy as a consequence of globalization and the current turmoil. In some others I hope to propose solutions – some new, and some old. In many cases I will address the challenges and the blind spots which we face as monetary policy makers, and raise questions to which I myself do not yet know the answer. The developments that globalization has brought about has tested the limits of conventional monetary policy, both in terms of the current thinking about how monetary policy is conducted, as well as the effectiveness of the current approach to monetary policy. I will discuss these points in detail in a moment.