4  BIS Review 68/2002  Table 3 Real GDP growth in the UK Mean  St. dev  1956-1959  2.42  1.22  1960-1969  3.15  0.92  1970-1979  2.12  1.42  1980-1992  1.86  0.84  1993-2002  2.76  0.36  1956-2002  2.42  0.98  Note: Mean GDP growth is the total increase in real quarterly GDP over the period indicated, expressed as a four-quarter growth rate. Standard deviation is calculated on quarterly growth rates (not annualised) over the period indicated. Data up to 2002 Q2. Source: Bank of England calculations based on ONS data. It is, of course, difficult to identify the effect of changes in the monetary policy regime on the path of total output. One approach is to consider long runs of data which make it easier to identify structural breaks in the behaviour of output. Luca Benati of the Bank of England has been investigating the statistical properties of inflation over long periods for a number of countries. He finds that changes in the behaviour of inflation appear broadly to coincide with changes in the monetary policy regime. Some tentative evidence that this general conclusion applies to the UK can be found in the behaviour of ten-year forward interest rates on UK government bonds. At this horizon, high and variable interest rates are signs of high expected inflation and a large inflation risk premium.
The objective is to equip market participants with better information, let them take responsibility for making their own decisions and to judge the quality of the corporate governance of companies. But a disclosure-based approach can only work well if it is backed up by a robust enforcement regime. This is key to maintaining the confidence of market participants in the disclosure-based regime. In recent years, our regulatory authorities have acted decisively in the face of breaches by market participants, such as in the cases of ACCS, Citiraya and China Aviation Oil. Equally important for a disclosure-based regime is the raising of the bar on corporate governance standards themselves. Singapore’s approach here is a flexible one, recognising the need to cater to a range of companies of different sizes and resources. It comprises a balance of mandatory rules, captured in our legislation and listing rules, and best practice recommendations in the form of the Code of Corporate Governance. Listed companies are required to either adopt the best practice recommendations or to disclose instances where they have not done so and provide explanations for these – in other words companies must “comply or explain”. We will keep both our legislation and best practice codes up to date through regular refinement, so that they stay relevant to a changing environment. We will also keep close watch on developments internationally, to see if they might be relevant to the Singapore environment.