In the UK, we adopted a target for inflation as long ago as 1992 and the whole framework for taking decisions about interest rates was overhauled after the 1997 election. I am sometimes asked how different British economic history would have been if we had adopted the present approach to monetary policy at various landmark dates – such as 1976 or 1979. This is a hard one. Tolstoy famously said that all happy families are alike, but unhappy families are each unhappy in their own way. It is rather the same with monetary policy. There are very many ways of getting it wrong – the UK has some experience here - but the hallmark of all good monetary policy is what Hans Dietrich Tietmeyer (President of the Bundesbank in the 1990s) used to call ‘the three Cs’: credibility, consistency, and continuity. BIS Review 116/2006  3  My own view, for what it is worth, is that there has been a virtuous circle over the past 10-15 years when central banks have taken advantage of relatively benign global conditions to embed the three Cs, by successfully implementing better policy-making frameworks and establishing strong reputations for competence on the back of excellent track records. The Bank of England would have faced a tougher challenge in doing this in the economic circumstances of the 1980s, and certainly the 1970s – even if the political consensus had existed to support such an experiment (which it didn’t).
The global forest acreage has reduced by 40% in the last 300 years. In many countries around the continents, hectares of forests are lost annually, resulting in severe deforestation issues that will leave adverse consequences to future generations. Sustainable development is hence paramount, necessitating financial support, strong political will and fundamental cultural changes to create the necessary enabling environment. Increased awareness for sustainable development is beginning to profoundly change the behaviour of consumers, who are beginning to demand for more green solutions. This trend and awareness has begun to shape preferences for goods and services, as evident from a survey of young adults conducted by the Boston Consulting Group where 73% of respondents stated that green factors are amongst the key considerations in making purchasing decisions. More households and businesses are adopting green lifestyles – a trend that is already well-entrenched in many advanced countries and gaining rapid momentum in several developing economies, including in the ASEAN region. The environmental products and services market globally is estimated to be worth USD1.4 trillion. The growth potential of this market is tremendous. On the financing side, the United Nations Environment Programme Finance Initiative has made important strides, working closely with the financial sector to develop and promote linkages between sustainability and financial performance, and in developing models for best practices including risk management. Financial institutions themselves have taken the initiative to adopt the Equator Principles, where financial institutions commit to channel financing to projects which are both economically viable and environmentally sustainable.