They think that pushing down the interest rates to near zero and pumping large amounts of money into the banking system will give rise to the following positive chain effects – (a)  the interest expenses of borrowers, including individuals, corporations and governments, will be reduced;  (b)  with lower interest rates and central banks scooping up low-risk sovereign bonds, investors can only resort to equities, properties and other assets in search of higher yields;  (c)  asset prices will rise as a result, creating a positive wealth effect which will spur consumption and investment; and  (d)  consumption and investment will, in turn, stimulate employment. 9. Since the consensus was that in a zero interest rate environment QE was the right prescription, when the recovery proved weaker than expected, the natural diagnosis was that the treatment was too short and the dosage was insufficient, which led to expansion of QE and for a longer period. Indeed, in the case of the European Central Bank, the treatment went as far as introducing negative interest rates. Is QE a panacea with no side effects? 10. While there are benefits, there is a flip side to QE. I share the view of some economists that the effectiveness of QE is partly offset by the adverse side effects of zero interest rates and its prolongation. Here are six side effects that may possibly arise. 11.
But of late, we have noticed a worrying trend of FA representatives conducting or wanting to conduct other activities alongside providing financial advice. Let me give a few examples.   We have received queries from insurance agents who also want to be real estate agents. They want to be allowed to market and earn commissions from property transactions, often to the same customers they provide financial advice to.   Some FA representatives have even applied to the Casino Regulatory Authority for a junket promoter license!   MAS has received complaints against FA representatives who used their regulatory status to market questionable schemes in gold bullion. Some of these activities are clearly in conflict with FA activities. They risk undermining the interests of consumers. We will review the activities that FA representatives can conduct outside their advisory role, to ensure that representatives continue to put their customers first. Specifically, we will work with the industry on a list of activities that FA representatives should not engage in. To my mind, the activities with clear conflicts include:   money lending;    promoting junkets for casinos;    selling real estate; and    marketing investment products which do not accord safeguards to customers under the Financial Advisers Act. 4  BIS central bankers’ speeches  We will also review other activities that FA representatives engage in that are not in conflict but which may distract representatives from their professional focus.