The second caveat is that central banks have been buying government bonds, which stimulate the economy by pushing down term premia and so longer-term real rates. But while QE has contributed to lower term premia and bond yields, much of the decline in the trend real rate pre-dates QE, and the crisis more generally, as both real expected policy rates and term premia fell. And it’s worth noting that the decline in long rates has also been seen in countries where there hasn’t been QE, such as Canada and Australia, although this in part probably reflects international financial market flows following falls in yields elsewhere. Finally, this analysis of the trend real rate does not consider the possibility that trend real rates can be moved around by long financial cycles and the impact of the associated leveraging and deleveraging on interest rates. These effects could well have acted to push up on trend real rates in the long buildup of leverage before the financial crisis and to have pushed down on rates during the protracted deleveraging that followed the bust. Some of these effects will be shorter lived and are best thought of as part of the natural rate cycle to which I will return in a moment. But to the extent that these effects are longer lived they may well have pushed down the trend real rate. And of course there is a broader caveat here.
Page 1  Competitiveness and productive investment: What parts do they play in the reform of insurance regulation? – speech by Charlotte Gerken Given at JP Morgan European Insurance Conference  Page 2  Published on 14 June 2022  Charlotte Gerken talks about the goals of competitiveness and productive investment, and the impact these are having on the Review of Solvency II. She says that changes to regulations for UK insurers could help to achieve these goals. Then she focuses on: investment flexibility the valuation of liabilities process improvements  Speech Thank you for your introduction and for inviting me to this conference. Since the Government announced the Solvency II review, there has been much emphasis on the desirability of reform to enhance the insurance sector’s competitiveness and its capacity to make productive investment. Today I would like to outline how competitiveness and productive investment relate to the Prudential Regulation Authority’s (PRA) approach to the review by focussing on three areas: 1. Investment flexibility 2. The valuation of liabilities 3. Process improvements To put the review in context, though: the core framework underlying the Solvency II regime and its principles are broadly fit for purpose, and are in line with existing and emerging international standards. The review does not involve tearing it up and starting again – not least because of the substantial sums invested by industry in the last decade in adopting it. Industry responses to HM Treasury’s Call for Evidence[1] were largely in agreement with this approach.