And if the advanced countries’ consumption stops growing, what will happen to global economic growth and particularly that of emerging countries with entirely export-oriented economies? Which brings me to my third remark: we need the emerging countries to continue investing their savings in advanced countries. We therefore need properly functioning international financial markets. In a world where the savings and financing needs are so geographically dislocated, properly functioning financial markets are a prerequisite for economic growth. But, today the capital markets appear very unsettled and full of anomalies, and not just in Europe. •  For example, certain sovereigns (the USA and UK for example) borrow today at historically very low nominal interest rates and at negative real interest rates despite the fact that their deficits are around 10% of GNP and that doubts exist regarding the future evolution of their debt levels. •  Another anomaly: large corporations have accumulated unprecedented cash reserves (several trillions of dollars) despite numerous highly profitable and unexploited investment opportunities around the world, unsatisfied infrastructure needs and investment bottlenecks in commodities production. Fourth remark. We can identify two reasons for this situation: •  The first is the general and exceptional uncertainty weighing on the global economy. Uncertainty makes liquid and safe assets more attractive. It makes investment less attractive. It can therefore partly explain the phenomena that I have mentioned. •  The second reason is more structural: a malfunctioning of our financial intermediation mechanisms. There are doubts about the solidity of banks in numerous countries.
Hence, you need to raise the profile of the career in the insurance industry collectively, to attract the best and the brightest. With the right human capital, the industry will be better placed to capitalise on Asia's growth prospects. There is also a dearth of underwriting capacity in the region for some specialised risks, for example aviation, energy, political and terrorism risks, to name a few. MAS will explore ideas to enhance our competitiveness to encourage such risks to be underwritten in Singapore. We welcome feedback and suggestions. Specialisation and new techniques We recognise the importance of ancillary service providers within the insurance ecosystem, and believe that increased usage of specialised service providers can make our insurers more competitive. Singapore's existing infrastructure, political and economic environment is conducive for such service providers to thrive in, and we will enhance the business case with initiatives to help reduce the cost of operating in Singapore. Examples of specialised service providers include run-off management and related services, claims management and processing services, loss adjusting services and policy administration services, amongst others. 2  BIS Review 103/2006  Another new technique that can enhance insurers' competitiveness is insurance-linked securitisation, or ILS. ILS enables insurers to transfer risks to the capital market to strengthen their balance sheets. These securities also contribute to a more diverse and vibrant capital market. The global ILS market saw a record level of issuance in 2005, and 2006 looks set to exceed 2005.